Pension and gratuity allocations up 10pc to Sh189.09bn

Source: Capital FM Kenya
Author: Amukohe Yvonne

NAIROBI, Kenya, April 8 - The allocation for pensions and gratuity has increased by 10 percent from the previous financial year's allocation of Sh171.83 billion to Sh189.09 billion in the 2023-24 financial year (FY).

Budget hikes, according to the Controller of Budgets (CoB) submission, are mainly attributed to the additional allocation towards ordinary pensions of Sh13.38 billion (19.2 percent) and the Public Service Superannuation Scheme (PSSS) of Sh2.59 billion (10 percent).

This increase brings the total 2023/24 FY allocation towards ordinary pensions to Sh82.93 billion, a 43.5 percent increase compared to Sh63.18 billion (36.8 percent) recorded in FY 2022/23 and the Public Service Superannuation Scheme to Sh28.46 billion.

"The budget implementation of Pensions and Gratuities has been impacted by the downtime of the Pension Information System," said CoB.

"Additionally, there has been underfunding from the Exchequer, as evidenced by the release of Kshs.59.01 billion compared to the reported expenditure of Kshs.82.3 billion," it added.

The allocation for pensions and gratuities in the fiscal year 2023-24 is divided into four categories: ordinary pensions (Sh82.93 billion), commuted pensions and gratuities (Sh77.56 billion), other pension schemes (Sh134.1 million), and the Public Service Superannuation Scheme (PSSS) (Sh28.46 billion).

The CoB recommends timely funding of pension and gratuity votes and clearance of arrears on government contribution remittances to PSSS.