Wamuzi News Ke
The already critical situation of the pension funding in Kenya has been further aggravated and the reason for this is the failure of the government to pay up the mandatory pension contributions of Sh1.2 billion to the Public Service Superannuation Fund (PSSF).
This very issue has raised alarms not only among the retirees and civil servants but also among financial experts with regards to the security of retirement savings and the management of public finances.
The Office of the Auditor-General in its audit report states that although the government cleared Sh9.38 billion of its outstanding pension obligations by August 2025, still a whopping Sh1.2 billion remained unpaid, thus revealing a continuous lack of adherence to the statutory pension requirements.
The amounts that have not been paid form part of an even bigger backlog that used to be Sh10.6 billion at the end of June this year which was the total of all overdue contributions. As per the pension law, each and every employer which includes the government as well is bound to send both the employee and employer contributions to the pension custodian within a maximum of 10 working days after the end of every month.
Not sticking to this deadline is not only going against the Public Service Superannuation Scheme Act, 2012 but is also cutting short the period during which the funds can be invested to earn returns for the contributors.
Auditor-General Nancy Gathungu has severely condemned the continuous delays and cautioned that if fully arrears including any statutory penalty for late payment are not settled then the pensioners will lose the investment returns which they otherwise would have earned.
Gathungu also mentioned that delayed contributions “undermine financial prudence” and are a threat to the long-term sustainability of retirement benefits for civil servants.
This newest disclosure adds to an already severe saga of government pension remittance failures. The audit shows a pattern in fiscal years when a lot of contribution payments were delayed — Sh219.9 million for the period ending June 2023 and another Sh3.2 billion for the next financial year 2023/24 — even though these were paid off by September 2024.
The pattern of deficits highlights the deep-rooted problems in government cash-flow planning and the pension remittance process The government’s inability to transfer pension contributions on time has consequences that are not just limited to administrative compliance but have far-reaching impacts.
More and more retirees and soon-to-be-retirees are expressing their worries regarding the safety of their future pensions as uncertainty rises whether the money will be credited in time to get the most out of investment growth and to keep the purchasing power of their benefits.
Civil servants’ unions have already started to ask questions from the National Treasury and the Public Service Superannuation Fund, asking for clarifications on how the outstanding contributions will be handled and for guarantees that the pension scheme’s actuarial integrity will not be affected.
Union representatives contend that recurring delays are indicative of underlying budgetary constraints and may thus reduce public trust in Kenya’s retirement systems.
