NAIROBI, Kenya — Treasury Cabinet Secretary John Mbadi has acknowledged that ghost beneficiaries continue to siphon public funds from pension payroll, vowing that the government is moving swiftly to root out fraud and overhaul the country’s pension administration.
Appearing before the Senate on Tuesday, Mbadi confirmed that some payments were still being made to deceased or non-existent pensioners.
He said the Treasury had begun rolling out strict verification procedures to clamp down on abuse and restore order in the system.
“Strict pension verification procedures are being instituted, and this will help us reduce errors, fraudulent submissions, and unauthorized payments,” said Mbadi.
“We are working with commercial banks and financial institutions to monitor dormant pension accounts, flag suspicious activity, and prevent unauthorized withdrawals.”
the Treasury is now integrating biometric data with the National Savings Registry with an aim to detect and eliminate ghost pensioners in real time.
“We are alive to the fact that some pensioners who are no longer alive continue to receive payments. Through biometric pension verification and the e-pension system, we are working to stop this,” he told the Senate.
The CS was responding to pointed questions from Senators on delayed pension disbursements, corruption within the Pensions Department, underfunding, and a slow transition to digital processing.
He attributed most of the delays to late submissions of claims by employers, missing documentation, and occasional revenue shortfalls.
“To address these delays, employers are now required to notify employees of retirement one year in advance and submit pension claims to the department at least nine months before the official retirement date,” he said.
Mbadi added that the Treasury had already deployed 18 pension officers to key institutions, including the Teachers Service Commission (TSC), to fast-track verification and reduce backlogs.
According to Mbadi, the Treasury has commissioned the development of an end-to-end enterprise resource planning (ERP) system that will handle pension records, automate claims, and link data across government agencies.
“The Treasury has onboarded a contractor to develop an enterprise resource planning solution which fully digitizes pension. Online claims submission will be done, a self-service portal created, and automated approvals integrated with key government databases,” said the CS.
He said the new system is expected to go live by July 1, 2025.
“This will help us now… we will automatically transit those who are from the payroll to the pension payroll,” he added.
Mbadi told Senators that pension payments are now being prioritized in the national budget to address the budgetary issues.
“Pension payments are treated as a first charge obligation in the national budget, ensuring they are allocated sufficient funds,” he said.
Between April 30 and May 21, the Treasury disbursed KSh17.4 billion to pensioners.
By the end of May, a balance of KSh16.9 billion was still pending, down from KSh23 billion carried over from the previous financial year.
“I think we are going to do much better than last year, although we should do 100%,” he said.
Mbadi also weighed in on recent findings by the Auditor General regarding questionable NSSF investments.
He said that while pension funds operate with some autonomy, the Treasury would await guidance from Parliament.
“If there are irregularities in how investments were made, we will act on the recommendations of the parliamentary committee once they conclude their work,” he said.
Mbadi said the digital reforms were designed to make it easier for retirees especially in remote areas to receive services without needing to travel.
“We are having a self-service portal. Even at the comfort of their homes, they can access almost all the services that they need. We have also put in place services at Huduma Centres to support this,” he said.
