Kenyan workers who have attained the age of 60 years are at risk of financial struggles when they retire due to unpaid pension contributions.

A report released by Auditor General Nancy Gathungu has raised concerns that National Treasury is yet to disburse Sh7.1 billion worth of pensions to retirees, some of whom have since died.

In the report tabled in the National Assembly last week, Gathungu said the outstanding balance owed to pensioners has been increasing over the years mainly due to the demise of the pensioners or for lack of claims by dependents.

She regretted that some of the unsettled monies have been outstanding for more than ten years as the National Treasury did not have the funds to pay.

Reads the report: “The balance has been increasing over the years mainly due to the demise of the pensioners or for lack of claims by dependents. However, Management did not provide an analysis to determine what is payable and what needs to be receipted back. Further, the Department did not have the funds in the bank account to pay the returned pensions if they were to be claimed by the beneficiaries.”

Of the outstanding Sh 7.1 billion, the report shows that Sh1.811 billion has not been paid for the last ten years, Sh 1.880 has been outstanding between six to ten years, Sh 1 billion has been outstanding between four to five years, Sh1.93 billion has been outstanding between one to two years while Sh 418 million has been outstanding for the last one year.

Reads the report: “ln the circumstances, the accuracy and completeness of accounts payables – deposits and retention balance of Sh.7,109,779,106 could not be confirmed.”

Gathungu further raises concerns that during the year ended June 30, 2024, payment of pensions took an average waiting time of 195 days as compared to National Treasury’s service charter that provides that retirement benefits shall be paid within 90 days upon the claim being received. She further raised concerns that the department made payments to pensioners of Sh 118.5 billion against the budgeted amount of 154.5 billion.

Established standards

Reads the report: “ln the circumstances, delay in payment of pensions represents a failure to meet established service standards and negatively impacts pensioners who rely on timely payments.”

Of the Sh118.5 billion Gathungu says includes an amount of Sh61.66 billion and Sh 8.4 billion paid to civil pension and military pensions yet an audited conducted on the payroll indicated there were some missing pensioners details such as Identity Cards numbers while some pensioner employee numbers had been recorded as “dummy”.

Adds the report: “In the circumstances, the credibility and integrity of the pensioners’ data used for processing pension payments could not be confirmed.”

The report comes hardly days after the Retirement Benefits Authority (RBA) raised concerns that a number of Kenyans who have attained the age of 60, were yet to receive their retirement benefits as they were yet to remit Sh56 billion to pensions as public entities had only contributed 19 percent despite deductions.

Jackson Kutu who was representing RBA CEO before the National Assembly finance and national planning committee revealed that counties, public universities, sugar and water agencies were yet to abide by the law and remit all the funds.

He regretted that although the institutions actually receive the disbursements, they allocate the said monies to other factors leading to the defaults.

As a result, the representative mentioned that they are now considering making deductions directly from the source and are seeking the support of the national government to counter such.

He said: “So what we have done, we have to begin additional tuition for counties, we are expecting that we’ll be able to do with that, because they are saying they have not received a petition from the government.”