The Ministry of Treasury has unveiled plans to automate the deduction and remittance of pension contributions for public servants by integrating the government’s payroll and financial management systems.
Treasury Cabinet Secretary John Mbadi said the reforms are aimed at reducing delays in pension remittances, improving compliance and safeguarding workers’ retirement savings.
Mbadi announced the reforms on Thursday, August 6, when he appeared before the Senate Standing Committee on Labour and Social Welfare to present the Treasury’s submissions on a petition concerning the winding up and liquidation of the Technical University of Kenya (TUK) Staff Retirement Benefits Scheme.
Treasury Announces HRIS-IFMIS Integration to Safeguard Workers’ Pension Savings
According to Mbadi, the reforms will integrate the Human Resource Information System for the Government of Kenya (HRIS-Ke) with the Integrated Financial Management Information System (IFMIS).
The integration will enable pension contributions to be deducted automatically during payroll processing and remitted directly to the relevant retirement benefits schemes.
The Treasury said the move is expected to improve accountability, strengthen compliance with pension remittance requirements and reduce cases of delayed or non-remittance of employees’ retirement savings.
“The reforms will facilitate the automatic deduction and remittance of pension contributions during payroll processing, enhance transparency, reinforce compliance and significantly reduce the risk of delayed or non-remittance of employees’ retirement savings,” CS Mbadi said.
Government Assures Workers Over Retirement Savings
Mbadi said the government remains committed to protecting workers’ retirement savings through stronger policies, sound governance and enhanced institutional oversight.
Mbadi added that although the regulation and supervision of pension schemes is the responsibility of the Retirement Benefits Authority (RBA), the Ministry will continue to implement reforms that are aimed at strengthening accountability and compliance across the sector.
The Cabinet Secretary told senators that the National Treasury would continue working with the Retirement Benefits Authority, the Ministry of Education and other stakeholders to safeguard the interests of members of the Technical University of Kenya Staff Retirement Benefits Scheme during the liquidation process.
He added that the government would also pursue broader reforms aimed at strengthening the governance, resilience and long-term sustainability of Kenya’s retirement benefits sector.
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Treasury Expands Pension Reforms
The latest reforms come after the Treasury rolled out the Pension Administration System (PAS), a fully digital platform introduced to replace manual pension processing and address delays that have affected retirees for years.
The platform allows pension records and contributions to be processed electronically, enables public servants and retirees to track their pension records online, and digitizes claims and verification processes.
According to the Treasury, the system is expected to reduce cases of missing files, minimize manual errors, and speed up the processing of retirement benefits.
Also Read: TSC Extends Teachers’ Mandatory Pension Portal Registration Deadline
KSh115.7 Billion Pension Arrears Spur Payroll Reforms
The proposed payroll reforms also come amid concerns over delayed pension remittances by public institutions, particularly county governments.
Figures from the National Treasury show that county pension liabilities stood at KSh115.7 billion as of October 31, 2024, compared to KSh21.3 billion that was inherited from the defunct local authorities before devolution.
A multi-agency task force formed to address delayed and unremitted pension deductions recommended that pension contributions be deducted automatically during salary processing through HRIS-Ke and IFMIS.
The task force also proposed treating pension deductions as a first charge on county revenue to ensure employees’ contributions are remitted promptly.
Senator George Mbugua said pension deductions should never be used to finance other county operations.
“Pension deductions belong to workers. Once the money is deducted from an employee’s salary, it must be remitted to the pension scheme immediately. Keeping it exposes workers to uncertainty and undermines their retirement security,” he said.
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