An Act of Parliament to amend the Pensions Act.

Clause 2

Amendment of section 2 of Cap 189
The Pensions Act is amended in section 6 by inserting the following new subsection immediately after subsection (1):

(1A) The pension under subsection (1) shall be paid within thirty days from the date such pension becomes payable.

This proposal allows pensioners to receive their pensions in a timely manner.

The following are the reasons for receiving pensions in a timely manner:

a. it prevents delays as pensioners are able to receive their pensions within a stipulated period;
b. timely payment of pensions ensures financial stability for retirees, allowing them to meet their daily living expenses, healthcare needs and other financial obligations; and
c. timely payment of pensions helps to maintain the trust and credibility of pension providers. This instills confidence and ensures that pensioners can rely on their benefits as promised by the pension providers.

Even though this is a good proposal, it’s bound to encounter various challenges.

State parastatals take a long time to remit pensions to the National Treasury.

In the Business Daily newspaper dated 13th March 2023, it indicated that one hundred and sixty state parastatals were yet to remit their pensions to the National Treasury. The unremitted pension arrears amounted to 21.8 billion Kenya Shillings.

To remedy this, we propose the imposition of a monthly interest rate (perhaps 3%) on pensions held beyond the thirty-day period.

This means that a pensioner will receive his pension accompanied by the interest that accrued after the thirty-day prescribed period.