NAIROBI, Kenya – The National Treasury and the Salaries and Remuneration Commission (SRC) are at odds over proposed changes to the Pensions Act, Cap 190, that could significantly impact retired public servants.
The contentious amendments, encapsulated in the Pensions (Amendment) Bill, 2024, introduced by Matuga MP Kassim Tandaza, aim to peg pension calculations to the current salary levels for respective job groups.
During a recent session with the National Assembly’s Departmental Committee on Finance and National Planning, Treasury officials strongly opposed the proposal, citing concerns over its potential economic implications.
Treasury Principal Secretary Chris Kiptoo, represented by Director of Pensions Michael Kagika, warned that implementing automatic cost-of-living adjustments could strain the Exchequer, especially during inflationary periods.
Kagika argued that such changes would disrupt fiscal planning and divert resources from critical public services.
“The financial burden on the Exchequer would be immense, necessitating the government to redirect funds from essential development projects,” he stated.
In contrast, the SRC has expressed support for the amendments, citing the need to address disparities in pension payments under the current system.
The commission argues that using updated salary scales for pensions would promote fairness and enhance retirement benefits for all public servants.
To address concerns over the financial feasibility of the proposed changes, Kagika disclosed that an actuarial valuation of the pension scheme is in progress, with results expected by mid-April.
The findings will provide critical insights into the long-term sustainability of implementing automatic adjustments in an era marked by an aging population and rising life expectancy.
The debate over the Pension Bill comes amid broader discussions about the cost of living and economic stability.
The Treasury maintains that while the intent of the amendments is commendable, a thorough analysis of their fiscal impact is necessary.
Meanwhile, SRC officials argue that prioritizing fair compensation for retirees aligns with constitutional principles of equity and social justice.
