The State continues to display incredible lethargy in implementing key reforms that would help it cut expenditure at a time of sluggish growth in revenues. The government is grappling with increased pension costs now at Sh104.4 billion which are again expected to rise to Sh126 billion next year yet it seems to be unable to carry out the necessary reforms on this front.
Almost a decade ago, the government decided to raise the retirement age to 60 years from 55 to cut the number of new retirees and, therefore, the burden of paying its retired civil servants.
Yet it did not implement pension reforms to ensure that public servants contribute to their retirement savings.
The contributory scheme was arrived at when total payments to government retirees was slightly less than Sh40 billion annually. However, it is clear that this has more than doubled and will have more than tripled next year.
The failure to implement the contributory scheme flies in the face of rationalising public expenditure. Ghost pensioners are hurting the government more.
This growing burden is clearly unsustainable unless the system is reformed.
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