Retirees to get pension a month after job exit

Public service workers will from the year beginning July 2021 start getting pension payouts a month after they retire in a plan the Treasury says will ease financial challenges they endure in early stages after they exit employment.

The Treasury says it has hired about 100 new staff to expedite payment of retirement benefits by initiating the process before civil servants, teachers and disciplined service officers — police, military and prisons — exit the service.

Director of pensions at the Treasury Michael Kagika said his staff are being seconded to the offices of state ministries, departments and agencies with high turnover of retirees to authenticate and verify data before government employees retire.

“Processing claims remains one of our foremost concerns because we do not want persons who retire to wait for unnecessarily long time before they can access their pension,” Mr Kigaki said.

Pension payroll

“The commitment we have given ourselves is that by the turn of the financial year (starting July 2021), we want everybody who retire to access his pension the next month, meaning you are on salary payroll this month and the next month you should be on our pension payroll.”

This comes at a time the Treasury has started creating awareness on transition to a contributory retirement plan next month from the current defined contribution scheme.

The new pension scheme is being implemented more than eight years since the Public Service Superannuation Scheme (PSSS) Act became law.

Public service workers aged below 45 will contribute two percent of their pay to the retirement scheme in 2021, rising to five percent the following year and 7.5 percent thereafter, with the government topping up the savings at the rate of 15 percent.

Attract interest

Civil servants aged 45 years and above will have to option to apply to join the PSSS, which will be regulated by the Retirement Benefits Authority (RBA), within three months from the start date in January.

Under the new regime, delayed payment of due pension will attract interest every month.

Mr Kagika said some 31 pension staff have been seconded to the Teachers Service Commission (TSC) — the largest employer in public service — and another six officers to the Vigilance House for police.

A similar arrangement is being done with ministries of Health and Agriculture, he added.

Seconded pension’s staff are tasked with helping in verify, correct and add missing data in the files of retiring officers before they are forwarded to the Treasury for processing and payment.

“It’s very important to hold the dignity of persons who have committed their entire working life to public service,” Mr Kagika said. “You don’t want to be coming from as far as Turkana to follow up on your pension in Nairobi when you should be enjoying your retirement and your bank notifying that you have received your cash.”