Ex- civil servants pension pay to increase by 3 % in July

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Once every two years, the monthly pension paid to former civil servants increases by three per cent in a bid to keep up with high inflation rates plaguing the country and this year is no different with approximately 300,000 civil servants set to reap from the increment.

Combined with the number of civil servants who will have retired in the two years to June next year, the pension review will see it’s bill rise from Sh86.2 billion in the current financial year to Sh104.4 billion in the next budget. This translates to an increment of Ksh. 18 billion.

 The government’s failure to push through necessary reforms, including starting the long awaited contributory pension scheme is being blamed for its build-up.

 “The retirees should expect a three per cent review. We do it every two years and it is in the budget estimates tabled in Parliament last week,” a source at the treasury is quoted as saying by the Business Daily.

Despite the scheduled pay increment of three percent the former civil servants will still fall behind the country’s inflation rate which stood at 4.3 per cent as at last year and 9.2 per cent in 2017.

Delayed pensions are still on the rise despite the government’s decision to increase the retirement age to 60 from 55 in 2010. The move was aimed to halt the fast entry of retired civil servants into the pension pool to enable the government to set up the contributory pension scheme, which has been shelved several times.

Civil servants, unlike workers in the private sector, do not contribute to pension and their benefits are paid straight from taxes.

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