More than 80,000 former civil servants receive only Sh4,000 a month in pension payments, as MPs now push the government to bump up the retirees’ pay.
MPs have directed the government to table, within two months, a report on budgetary requirements that would see 319,207 retired civil servants get substantial increments to their monthly earnings.
The move, though, looks set to face major hurdles as several State agencies caution that increasing payments to pensioners could further strain the government, which is already facing financial challenges.
The National Assembly’s Public Petitions Committee has asked the Treasury and the Salaries and Remuneration Commission (SRC) to conduct an actuarial review on financial and budgetary requirements for facilitating more pay to 319,207 pensioners.
The move follows complaints that the group has, over the years, received low pay despite rising inflation.
The directive follows a petition by the Kenya National Association of Public Service Pensioners (KNAPS) in Kericho, a body representing former civil servants and retirees countrywide.
KNAPS pushed to have former civil service non-contributory pension schemes merged with the current Public Service Superannuation Scheme (PSSS), arguing that members of the latter enjoy better benefits.
The association says about a quarter of its members, close to 80,000, earn less than Sh4,000 in pensions monthly.
“The committee recommends that the National Treasury, in liaison with the SRC, conducts actuarial reviews every three years and provides for resultant fiscal/ budgetary requirements. The first such actuarial review should be conducted by 31st December 2026,” the committee said in a report tabled before Parliament on September 30.
The Association approached Parliament with prayers to have all non-contributory civil service pension schemes amalgamated into a single framework, gazettement of appropriate pension increases to cushion pensioners against the effects of inflation and the rising cost of living and a review of the law to protect pensioners and their beneficiaries.
They complained that when the government introduced the PSSS in 2021, it blocked new entrants into the old civil service pension scheme, “leaving existing pensioners under an obsolete system whose obligations remain unmet in terms of adequacy and regularity of payment.”
“Approximately 25 per cent of public service pensioners currently receive pensions of less than Sh4,000 per month, an amount they contend falls below the prevailing poverty threshold and is insufficient to meet basic living expenses,” the committee’s recording of the association submissions when it appeared before it in June shows.
Besides the push to have their pensions raised and schemes merged with the PSSS, the pensioners also lobbied to have public service retirees considered for positions such as consultancies, mentorships “and other income-generating opportunities.”
MPs joined different government agencies in rejecting the push to merge the old pension schemes with the PSSS, the current contributory scheme applicable to public servants.
The government initiated the transition from the old pension scheme to the PSSS in January 2021, moving officers aged 45 and below to a contributory system where they would be deducted 7.5 per cent of their salaries towards retirement savings, as their employers match a similar contribution.
Membership of the PSSS has subsequently grown to 529,635 as of June 2026, accounting for 78 per cent of the public service pension industry.
The old pension scheme had a membership of 319,207 as of July, with new membership blocked as the government moves to the contributory framework.
Different government agencies opposed the association’s push to have the old scheme merged with PSSS, arguing that it would come with liabilities.
The Retirement Benefits Authority (RBA) told MPs that the government would first need to pay all accrued liabilities of the non-contributory scheme, estimated at over Sh1 trillion.
“According to an actuarial valuation report prepared by the National Treasury for the period ended June 2024, the estimated actuarial liability stood at over Sh1 trillion,” RBA Chief Executive Officer Charles Machira said.
The authority also cautioned that any decision to provide additional pension increases would require the government to consider fiscal implications, long-term sustainability and its overall impact on public finances.
Under the old pension scheme, no money was deducted from workers’ pay towards retirement benefits. Their pension pay was defined in the laws of the day. For present-day civil servants, 7.5 per cent of one’s monthly salary is deducted towards pension, with the government matching the same towards their retirement savings.
It means that their pensions will depend on how much will have accumulated at the point of retirement.
Treasury says it spends about Sh7.8 billion monthly to pay the 319,207 pensioners, totalling about Sh93.7 billion each year.
On the other hand, the 529,635 public servants saving under PSSS have accumulated Sh343.75 billion in savings, the majority of whom are aged 50 and below, thus still working.
While Treasury says it acknowledges the impact of inflation on pensioners’ purchasing power, it insists that “an actuarial recommendation provides an important technical basis for policy consideration but does not, on its own, automatically create a legal or fiscal obligation to implement a particular level of pension increase.”
The SRC also insists that while Treasury may initiate an actuarial study and recommend a pension increase for retirees, the commission has to be consulted and the increase should take into account “the prevailing fiscal realities.”
The State Department for Public Service told MPs that while it acknowledges that inflation can diminish the real value of pensions and force retirees to struggle with basic needs, “any increase in payments creates a long- term, continuing obligation and burden on the government, hence the need to ensure affordability and sustainability of payment of pension to all eligible public officers and their beneficiaries.”
