Agony of State pensioners mounts

Retired civil servants are calling for speedy mediation into the proposed changes to the State-run pension scheme to protect them from sliding into old-age poverty, barely two months after State assured to take action.

“In pursuit of your association’s objectives, working in close collaboration with your representatives, my ministry has developed a memorandum that will be submitted to the cabinet soon for consideration and necessary action,” assured Labour CS Ukur Yattani in December last year during a pension forum held in Nairobi.

Despite the pledge, The Kenya Association of Retired Officers (KARO) chairman Ibrahim Hussein last week said in a telephone interview that talks have since cooled with thousands of the association’s members still in desperate quest to meet officials from the labor ministry and the Treasury in an effort to help reverse low annuity payouts the association believes had subjected more than 25 per cent of its members into poverty.

Some of the urgent changes the senior citizens want include an overhaul of pension regulations to provide for regular review of monthly payments to cushion their buying power should the cost of living spike.

“It has not been easy to get hold of them but we are trying to push for some of those concerns that we believe are very important to us and future retirees,” said Hussein, adding that, the State retirees’ lobby group has been in talks with the Ministry of Labour, Social Security and Services to no avail.

Presently majority of public service retirees in Kenya are today drawing a depressing Sh2, 000 monthly pension which is way below the poverty line in Kenya of Sh 4,624 per month.

During its annual general meeting last year, KARO said it had submitted what it terms as ‘a comprehensive report to the Government for consideration and implementation on the review and enhancement of the Public Service retirees’ pension for equity and social-economic protection.’

The request, the association says, has been made in line with the Government’s existing policies on Social Security and Protection and the Big Four Agenda, whose implementation they hope will ensure protection of the pensioners from being pushed into extreme poverty through erosion of their pensions.

“Our recommendation is that the Government considers giving a waiver to retirees whose monthly pension is Sh5, 000 or less. We further urge the Government to adopt a policy where public servants can pay medical insurance premiums while they are young and in employment, to cover their medical costs after retirement,” said Hussein.

The association further wants a number of Government constituted salary review commissions, committees and policy statements including The Ndegwa Commission, 1970, Ramtu Commission, 1985, Sessional Paper no.3 of 1985, Proposed amendment of the Pension increase act, 1996 Bill, Munene Committee, 1996, Kipkulei Harmonization Commission, 1998 / 1999, The Musila Bill of 2005, Public Sector Remuneration and Benefits Policy Framework, June 2015 and Public Sector Remuneration and Benefits Policy, June 2015 implemented.

The commissions, according to him have all recommended that “whenever there are salary adjustments in the public sector, pensions should also be adjusted,” adding that, “this, unfortunately, has never been effected and low levels of pension continue to be paid to the retirees.”

In the current set-up of permanent and pensionable public workers, State entirely shoulders the burden of their pension liability. But starting from January next year, the country’s 600,000 civil servants will be shifted to a contributory scheme where they will be deducted 7.5 per cent of their gross salary while the government will contribute 15 per cent.

The new scheme will be flexible as it allows the workers to transfer savings to another scheme in case they quit public service before retirement. In the non-contributory scheme one can only access contributions if they serve for a minimum of 10 years or at the retirement age of 60. The lump sum and monthly pension is determined by length of service and salary at the time of retirement.

Written By Steve Umidha