The government will clear all pension payments backlog by the end of the calendar year, Treasury CS Ukur Yatani has said.
"The National Treasury is re-engineering and upgrading the pension system to clear all pension payments. This will guarantee smooth transition of retirees from a monthly salary cheque to monthly pension payment," he said.
Speaking in Parliament during Budget reading on Thursday, Yatani said the increasing public pension budget and accumulation of pension claims remains a challenge.
"To reduce the burden on pensions, we will roll out staff own contributions plan in the next financial year," he said.
Yatani said the government will come up with a standardised retirement policy.
"The pension laws will cut across formal and informal sectors."
He said that the Kenyan economy is vulnerable to the effects of global warming and to minimise the adverse effects of global warming, we need to pursue a green economy.
Last month, Majority Leader Aden Duale published an omnibus law that, among others, removes a previous restriction on use of retirement benefits scheme funds to purchase homes.
Currently, the law only allows the use of up to 60 per cent of accumulated pension savings as mortgage collateral.
Salaried Kenyans will be allowed to use part of their retirement benefits to buy residential homes if Parliament approves a new Bill into law.
“This amendment is proposed to allow for the use of a percentage of the funds for purchase of a residential house,” Duale said.
If approved, the proposed changes will omit restrictions, which prohibit schemes from using their funds to offer direct or indirect loans to any person.
