Politics and policy
By KIARIE NJOROGE, gkiarie@ke.nationmedia.com
In Summary
- The government paid Sh50 billion in pension in the year ending June 2015 and the size of payments could increase in the successive period if workers succeed in getting higher pay from the state.
Annual government pension payouts are expected to
surpass Sh50 billion as more public workers push for pay increments, the
Salaries and Remuneration Commission (SRC) has said.
The government paid Sh50 billion in pension in the year
ending June 2015 and the size of payments could increase in the
successive period if workers succeed in getting higher pay from the
state.
Pension is calculated based on the basic salary at
the time of retirement. The bulk of these payments are made to retired
teachers, members of the disciplined forces and civil servants.
SRC chairperson Sarah Serem said a study conducted
by the commission revealed that the public sector pension liabilities
stood at Sh900 billion as at June 30, 2013.
“The government’s annual expenditure on pensions
alone stood at Sh32 billion for the financial year 2013/14 and was
projected to rise to Sh50 billion in financial year 2014/15 due to
maturity of pension liabilities from new retirees,” said Ms Serem.
“This liability continues to burden the government
and any further upward adjustment in salaries will further aggravate the
pension liability.”
The pronouncements come at a time when teachers have gone on strike demanding a 50-60 per cent increase in their basic salary.
The pronouncements come at a time when teachers have gone on strike demanding a 50-60 per cent increase in their basic salary.
On Sunday, President Uhuru Kenyatta said if the
teachers are paid the Sh17 billion that they are demanding, the
government would have to harmonise salaries of other civil servants – an
exercise that would increase the wage bill by Sh118 billion.
The government has over the years paid pension from
the Consolidated Fund as opposed to the private sector practice where
employees contribute a portion of their salaries and the employer
matches it to create a retirement fund.
Plans to create a similar retirement scheme for civil servants has been mulled for several years but is yet to be set up.
Some civil servants could still have their salaries
reviewed next year, once a job evaluation exercise that the SRC is
conducting is concluded.
Ms Serem said those whose jobs would be found to
have been undervalued will have their salary reviewed. But those who are
paid more than their job’s worth would not have their pay reduced.
“In the case where the job is undervalued, there will be a need to review the salary,” she said.
The job evaluation that covers the entire spectrum
of jobs across the government is more than 50 per cent complete and will
be concluded by June next year, said Ms Serem.
The government expects to spend about Sh630 billion
on public sector salaries in the current fiscal year that began in
July. This is about 52 per cent of all tax revenues collected.
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