Pension arrears hit Sh108 billion as retirees wait for payments
By the end of March 2025, only 52 per cent of the pension allocation, Sh115.14 billion, had been paid out of a total requirement of Sh223.15 billion.
The government owes retirees more than Sh108 billion in unpaid pensions and gratuities, with many pensioners facing severe financial difficulties, Controller of Budget Margaret Nyakang’o has revealed.
Despite pension claims of over Sh131 billion processed in the first nine months of the financial year, actual payments remain well below what is owed.
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By the end of March 2025, only 52 per cent of the pension allocation, Sh115.14 billion, had been paid out of a total requirement of Sh223.15 billion.
This slow disbursement has left thousands of retirees, including teachers and police officers, struggling.
“Retirees are suffering. There is a huge amount of money owed to them, yet they have served this country their whole lives,” Nyakang’o said during a presentation to the Public Debt and Privatisation Committee.
She revealed that the government processed Sh131.92 billion in ordinary and commuted pension claims during the current financial year but released only Sh101.78 billion, creating a gap of Sh30.14 billion.
A further Sh11.66 billion for the Public Service Superannuation Scheme remains unfunded.
Nyakang’o warned that the pension crisis has been ongoing, with a Sh23 billion shortfall from the 2023/2024 financial year rolled into the current one.
“This carried-over balance adds to the fiscal pressure. Pensions must be treated as first-charge expenditures to protect retirees’ livelihoods and uphold legal obligations,” she said.
The Controller of Budget’s remarks followed concerns raised by MPs who highlighted the growing plight of retirees still waiting for their pension dues.
“Kindly tell us the real situation because workers, including security officers and teachers, are dying without receiving their dues,” Emuhaya MP Omboko Milemba said.
Pension payments to retired public service workers fell short by Sh23.65 billion in the first quarter of the Financial Year 2024-2025, highlighting a growing public cash crisis amid declining tax revenues.
The National Treasury's Pensions Department processed Sh32.14 billion in payments during this period, reflecting a modest increase of 4.23 per cent compared to Sh30.83 billion from the previous year.
This shortfall is compounded by rising pension costs, driven by a wave of retirements which have further strained resources for President William Ruto's administration.
These financial challenges hinder funding for critical development projects, including road construction, affordable housing, and power transmission lines.
The increased expenses for retirees have joined debt obligations in limiting available funds for these initiatives.
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