The Government failed to remit the pension for the first half of the 2023/24 Financial Year to the Public Service Superannuation Scheme (PSSS), Controller of Budget Dr Margaret Nyakang’o has revealed.
Nyakang’o said that the Treasury only settled arrears it had skipped remitting to the PSSS between May and June 2023 totaling KSh4.59 billion.
During a presentation to the National Assembly’s Budget and Appropriation Committee, the Controller of Budget said, “The Government of Kenya’s contribution remitted to the PSSS had six-month contribution arrears, as the KSh4.59 billion remitted to PSSS was payment for May and June 2023.”
The State introduced the PSSS scheme in 2021 to reduce its pension burden after delaying for some months to establish the retirement plan.
Contributions to the scheme started at 2 per cent of the civil servants’ gross pay in 2021 and jumped to 5 per cent in 2022 and then 7.5 per cent last year.
The State contributes 15 per cent of the gross pay of the workers to the scheme. As at July last year, the scheme had a fund value of over KSh80 billion and 403,421 members.
The cash crisis also affected payment of pensions to retirees.
Thus while the State indicated that it had spent KSh82.3 billion on pensions, it had remitted KSh59.01 billion. This translates to half the KSh189.089 billion that the Treasury planned to allocate to pensions and gratuities this financial year.
Added Dr Nyakang’o, “Notably, the budget implementation of pensions and gratuities has been impacted by the downtime of the Pension Information System.”
She advised the government to ensure timely funding of pension and gratuities as well as the clearance of arrears on Government contribution remittances to PSSS.
By Brian Ndigo
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