NAIROBI, Kenya, June 4 – Treasury Cabinet Secretary John Mbadi has admitted the existence of ghost beneficiaries within the government’s pension payroll and pledged sweeping reforms to eliminate fraud, and restore trust in the pension system.
The CS appeared before the Senate to respond to questions on delayed payments, systemic corruption in pension administration, underfunding, and the digitisation of records.
He said delays are largely due to late submission of retirement claims, incomplete documentation, and liquidity constraints.
“Strict pension verification procedures are being instituted, and this will help us reduce errors, fraudulent submissions, and unauthorized payments,” Mbadi told Senators.
“We are working with commercial banks and financial institutions to monitor dormant pension accounts, flag suspicious activity, and prevent unauthorized withdrawals.”
He further disclosed that the National Treasury is integrating biometric verification systems with the National Savings Registry to detect deceased pensioners in real time and prevent continued payments to non-existent beneficiaries.
“We are alive to the fact that some pensioners who are no longer alive continue to receive payments.Through biometric pension verification and the e-pension system, we are working to stop this,”he said.
Mbadi confirmed that the National Treasury has deployed 18 pension officers to agencies like the Teachers Service Commission (TSC) to speed up processing in the verification and submission of the pension claims.
“One is timely submission of retirement notices. Employers are required to notify employees of retirement at least one year in advance and to submit pension claims to the pension department nine months before the official retirement age,”he noted.
He also outlined ongoing enhancements to the Pension Management Information System to reduce manual processing and improve data integrity.
“The Treasury has onboarded a contractor to develop an enterprise resource planning solution which fully digitizes pension, and that online claims submission will be done, self-service portal, automated approvals, integration with key government databases is also being addressed,”the National Treasury said.
Mbadi said the system is scheduled to be fully operational by July 1, 2025 that we will automatically transit those who are from the payroll to the pension payroll.
The CS assured Senators that payments are being prioritized to ensure the persistent problem of unpaid pensions doesn’t spill into new budget cycles.
“Pension payments are treated as a first charge obligation in the national budget, ensuring they are allocated sufficient funds,” Mbadi said.
He revealed that by the end of May, the Treasury had disbursed KSh17.4 billion in pension payments and had KSh16.9 billion still pending. Last year, the carryover stood at KSh23 billion.
“I think we are going to do much better than last year, although we should do 100%,”Mbadi remarked.
Mbadi said that while pension funds operate independently, corrective action would follow recommendations by Parliament.
“As the Auditor General has flagged it out… I would only wait for the parliamentary committee to conclude its work, make recommendations… and then action can be taken,”he expressed.
The CS also addressed access challenges for pensioners in rural areas, saying the Treasury is moving toward a fully digital and decentralised system.
“We are having a self-service portal… even at the comfort of their homes, they can access almost all the services that they need… and we have also put in place services at Huduma centers to support this,”Mbadi noted.
