The government has intensified plans to process pension claims for retired civil servants digitally after several false starts.
The move comes as the National Treasury works to fully integrate pension administration into the electronic Pension Management Information System (e-PMIS), allowing for real-time tracking of retirement cases.
Currently, pension claims are heavily reliant on the movement of voluminous hardcopy documents from one office to another, causing significant delays and financial hardship for retirees.
The National Treasury Building in Nairobi. Delayed disbursements by Treasury have been blamed for nonpayment of county staff salaries
Photo credit: Pool
The new system will enable pensioners to submit claims online, receive automated approvals and manage their pensions from home. This is expected to eliminate physical visits, reduce backlogs and improve services.
“This integration will improve efficiency, transparency, and timeliness in the processing of benefits. Training and sensitisation of officers are ongoing to ensure full adoption by MDAs,” said the PSC.
The initiative follows allegations of a fraud syndicate targeting retirees receiving lump-sum pension payouts.
Migori Senator Eddy Oketch revealed last year that fraudsters were accessing retirees’ bank details and stealing their benefits.
He cited the case of a retired teacher who lost Sh2.4 million deposited in her account at a leading bank.
“We are witnessing a disturbing trend where fraudsters are increasingly targeting retirees and defrauding them of their pension benefits. They are able to obtain sensitive banking information, enabling them to monitor transactions and defraud beneficiaries once pension payouts are deposited,” Senator Oketch said.
In response, National Treasury Cabinet Secretary (CS) John Mbadi said that the government is developing an end-to-end pension administration system.
“The aim is to transition retirees seamlessly from earning a salary to receiving pension benefits without going through rigorous processing steps,” CS Mbadi said.
The Treasury currently processes over 300,000 registered pensioners with an average of 20,000 new claims lodged annually. A surge in claims, coupled with slow processing, has led to backlogs often caused by lost documents and repeated processes.
Last year, Mr Mbadi announced the government’s plans to shift to a fully electronic, paperless pension system to reduce corruption, eliminate bureaucracy and speed up payments.
The move aims to strengthen retirement security, improve pension fund sustainability and enhance the post-retirement quality of life.
In February 2024, Controller of Budget Margaret Nyakang’o revealed that pension payments for ordinary and commuted pensions had reached Sh58.57 billion, but only Sh24.23 billion was covered by exchequer releases, leaving an unfunded gap of Sh34.34 billion.
Mr Mbadi said the government has since cleared Sh23 billion in outstanding pension claims and processed Sh17.4 billion in new claims between April 30 and May 21, 2025.
The new system will allow for online claims submission, self-service portals, automated approvals and integration with key government databases.
Treasury Cabinet Secretary John Mbadi during a public participation forum on the Budget and the privatisation of government owned institutions at Uasin Gishu County Hall in Eldoret City on January 18, 2026.
Photo credit: Jared Nyataya | Nation Media Group
Addressing senators’ concerns over perennial delays, the minister admitted that system challenges, lost files and corruption have contributed to delays.
“Manual systems are prone to abuse, and automation will seal these loopholes,” he said, noting that the pension management system is being upgraded to reduce manual intervention, improve efficiency, and enhance data security.
Strict pension verification procedures are being instituted to reduce errors, fraudulent submissions and unauthorised payments. The ministry is working with financial institutions to detect and flag suspicious activity while monitoring dormant pension accounts to prevent payouts to “ghost” pensioners. Biometric verification and e-pension systems have already been implemented.
In February 2025, the Ombudsman revealed that most complaints from retirees relate to delays in processing pension claims, with retired teachers among the worst affected.
In response, MPs are amending the Pensions Act to introduce stricter timelines: public entities must submit retirement documents within 30 days and the Pensions Department will have 60 days to process payments.
