Treasury acts tough on pensions

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Treasury acts tough on pensions

By John Oyuke, East African Standard

October 7, 2003

The government has appointed a task force to clear the backlog at the Pensions Department in readiness for the coming into effect of a new pensions law at the beginning of next year.

And in a move aimed sparing the government the heavy penalties stipulated in the new law, the Treasury has given the Pensions Department a three-months ultimatum to clear all retirement cases pending before it.

The department must streamline its operations before the end of the year, Financial Secretary, Joseph Oyula, demands in a circular released last week.

"It is observed that the pensions department currently holds a large number of files, which must be cleared within the remaining three months to January 1, 2004 when the amended Act comes into effect," the circular says in part.

The new Pensions Act, 2003 demands that public servants who have attained retirement age be retained on the payroll until their retirement benefits are paid.

It further states that unless payment is delayed by a court process, benefits to dependants be paid within 90 days the upon demise of a public servant.

The law is expected to restrain inordinate delays in the processing of retirement benefits to public servants that currently characterises the department. Some retiring public servants have had to wait for over three years to get their dues.

Operations at the department at one time became so vexatious, forcing the then Finance permanent secretary, Martin Oduor Otieno, to remind the officers that they were likely suffer the consequences of their lethargic operations upon their retirement.

In his circular, Oyula impressed permanent secretaries to facilitate the processing of required documents to enable the Pensions Department meet its obligations in accordance with the new law.

"It is important to note that retaining officers in your payrolls after retirement date will not only interfere with your personal emoluments budget provision, but the payments will also be irregular," Oyula says.

All ministries are expected to co-operate in ensuring smooth processing of pensions in accordance with the procedure laid down by Directorate of Personnel Management (DPM).

The DPM presents each ministry or department with a list of those expected to retire in the new financial year.

Ministries are also expected to adhere to DPM’s requirement that they submit papers for an officer retiring upon attainment of compulsory retirement age of 55 years nine months in advance.

The department further demands that papers for officers leaving the service on any other grounds be prepared and forwarded to the pensions department immediately the notice of retirement is received.