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SRC rejects Sh15bn push to enhance top judges’ retirement perks
Salaries and Remuneration Commission (SRC) acting Secretary/ CEO Margaret Njoka before the National Assembly Committee on Implementation at Bunge Tower Nairobi, on July 29, 2025.
The Salaries and Remuneration Commission (SRC) has opposed a Bill that, if enacted in its current form, will cost the taxpayer over Sh15 billion to enhance the retirement benefits of judges of superior courts at a time the country is facing hard times financing its operations.
The benefits will be fully funded by the government as the judges are exempt from making contributions to fund their benefits despite SRC recommending a Defined Contribution Scheme as per existing government policy and to align the pension increase to the provisions of the Pensions Increase Act of 2005.
SRC, an independent constitutional commission, notes in the July 25, 2025 memorandum to Mr Samuel Njoroge, the Clerk of the National Assembly, that the Judges Retirement Benefits Bill 2025, currently before the House, is fundamentally flawed and should be amended.
The Bill seeks to grant the Judicial Service Commission (JSC), the judges’ employer, unfettered powers to make recommendations on the judicial officers’ retirement benefits with the SRC playing second fiddle.
But SRC acting CEO Margaret Njoka revealed that the commission is uncomfortable with the Bill on account that it fails the country's fiscal sustainability principles and that it is a “direct usurpation” of its mandate and therefore unconstitutional.
Ms Njoka specifically noted that the Bill is in breach of Article 230 (4) (a) of the constitution- the mandate of SRC- as affirmed by the High Court in 2015.
The memorandum states that the post-retirement transport benefit and the post-retirement medical benefit proposed in the Bill that have a financial implication of Sh1.74 billion in year one, have not been set by SRC in accordance with its constitutional mandate.
“The proposed review of retirement benefits for judges of superior courts constitutes a direct usurpation of SRC’s exclusive constitutional mandate to set and regularly review the remuneration and benefits of State Officers, including retirement benefits,” warns Ms Njoka.
The country’s tough financial situation, caused by the huge public debt and depressed revenues, recently saw National Treasury Cabinet Secretary John Mbadi announce the reduction in capitation funds for learners in secondary schools from Sh22,244 per learner every year to Sh16,900.
The Bill defines “pensionable emoluments" to mean the basic salary and house allowance payable to a Judge, contrary to the October 13, 2023 SRC letter to JSC.
The SRC letter “communicated on the remuneration and benefits for State Officers in the Judiciary” and guided that, “for purposes of gratuity and pension, the pensionable emolument shall be based on the monthly basic salary.”
If enacted as published, it will benefit the judges in office on the date of its commencement, those who will be appointed after the law becomes operational and judges who retired after August 27, 2010- when the current constitution was promulgated.
According to the Bill, “where there is a conflict of law, the provisions of this Act shall prevail,” meaning that the SRC Act will be subservient to the Act.
This is notwithstanding that Article 172 (1) (b) (i) of the constitution “expressly” limits the JSC powers to make recommendations on judges’ remuneration.
Article 162 (1) of the Constitution identifies superior courts as the Supreme Court, Court of Appeal, High Court and the courts established by Parliament with the status of the High Court to hear and determine disputes relating to employment and labour relations and the environment.
“Moreover, these benefits have not been assessed against the principle of fiscal sustainability as required under the constitution and the SRC Act.”
"Sole agency"
Article 230 (4) (a) of the constitution recognises SRC as the sole government agency with the mandate to set and regularly review the remuneration and benefits of all State officers.
According to Article 260 of the Constitution, Judges of the superior courts are State officers just like the President, his deputy and members of the Cabinet, Chief Justice and his deputy, MPs, chairpersons and members of constitutional commissions and holders of independent offices- Auditor-General and Controller of Budget.
The others are county governors, Principal Secretaries, Magistrates, MCAs, Director of Public Prosecutions, Chief of the Kenya Defence Forces (CDF) and service commanders, Director-General of the National Intelligence Service (NIS) and the Inspector-General and Deputy Inspectors-General of police.
The SRC memorandum warns that the extension of enhanced post-retirement transport and medical benefits to Judges may trigger “legitimate clamour” for similar benefits by other State officers.
This, she says, would result in a significant ripple effect across the public sector, “thereby exacerbating an already constrained fiscal space and undermining efforts toward sustainable public compensation management.”
The memorandum and objects of reasons of the Bill, states that it has been in development since the late 1990s and “marks a significant step towards realizing the principles of the Constitution in respect of the Judiciary, its independence and the remuneration and benefits of judges of superior courts.”
In previous submissions on the Bill, SRC has guided JSC to amend the Bill to provide that pensionable emoluments mean the basic salary payable to a Judge as set by SRC.
This, SRC says, is meant to ensure harmony and fairness in the definition of pensionable emoluments as has been set by SRC for various State Officers.
“Such uncoordinated enhancement of benefits for one category of State Officers without comprehensive analysis of its implications for the entire public sector compensation framework contravenes the holistic approach that SRC's constitutional mandate is designed to ensure.”
In the last five years, SRC has been able to reduce the country’s wage bill from a high of 51 percent to 43 percent of the revenue collected in a year as of 2024.
This reduction has seen the government save at least Sh70 billion a year.
The Public Finance Management (PFM) Act states that expenditures on wage bills in government should not exceed 35 percent of the revenue generated annually.
SRC further notes that the advancement of such legislative proposals without due compliance with the mandate of SRC “constitutes a fundamental breach” of the constitution and undermines the “institutional balance and oversight mechanisms envisioned in the constitution.”
“SRC submits that it has neither initiated the review of nor set the retirement benefits proposed in the Bill,” reads the memorandum adding; “moreover, the proposals contained in the Bill have not been subjected to evaluation against the constitutional principles and factors that SRC is required to apply.”
While setting and regularly reviewing the remuneration and benefits of all State officers, the constitution in Article 230 (5) mandates SRC to observe some principles into account.
They include the need to ensure that the total public compensation bill is fiscally sustainable, the need to ensure that the public services are able to attract and retain the skills required to execute their functions, recognize productivity and performance and transparency and fairness and equal pay to persons for work of equal value.
Currently, the applicable retirement benefits payable to judges, excluding the Chief Justice and Deputy Chief Justice, are specifically governed by Pensions Act, the Pensions (Increase) Act and the Widows and Children Pensions Act.
Collectively, the three laws establish the legal framework for the computation, adjustment and administration of pensions and related retirement benefits for judges upon leaving office.
SRC notes that the retirement benefits for judges as provided under the three laws, may be reviewed by SRC in accordance with its mandate under the constitution and section 1 (a) of the SRC Act.
“Such reviews must be conducted taking into full consideration the principles expressly set out in the constitution,” says Ms Njoka.
According to Ms Njoka, given SRC’s “exclusive” constitutional mandate, any legislative proposals “seeking” to review the current retirement benefits for judges must comply with the constitutional framework.
“Legislative proposals developed or advanced outside this constitutional framework are constitutionally impermissible.
This requirement ensures that all modifications to judicial retirement benefits benefit from SRC’s expert analysis, adhere to remuneration principles.”
