Treasury now revives plan to digitize the pension application process

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The pension towers of the CBK.

The State Treasury Department has revived a plan to automate the filing and processing of pension claims to allow payments to retired officials within a month and eliminate backlogs.

The Treasury issued a tender for the development of an online pension management information system (PMIS) in February last year, but the process stalled.

The tender has now been re-tendered, opening the search for a consultant to design, deliver, install and commission the system to replace the web-based system that had been in place for 11 years.

The Treasury says it is currently servicing the contributions of about 300,000 pensioners registered with the Pensions Department, leading to challenges such as lost documents, repetitive processes and a backlog of cases that have not been decided and paid.

The current system for processing applications relies heavily on the movement of bulky paper copies of pension papers from one office to another, causing financial and psychological distress to pensioners.

Retirees and their family members have also visited numerous offices to claim and track pension payments, with the situation worsening for those who have served in various state institutions.

“The above challenges have impacted some critical functions of PMIS and the speed of processing annuity payments over the years,” says Treasury.

“This therefore led to the need to procure a modern pension system that is customer-centric, flexible, customer-accessible and more user-friendly.”

The Treasury Department’s Pensions Division receives an average of 20,000 new claims annually, resulting in claims accumulating faster than payments.

The Treasury Department expects the new system to offer claimants a 24/7 opportunity to apply for pension payments digitally and receive automatic notifications of the progress of the process.

It plans to spend ATS 146 billion on pensions in the fiscal year starting in June. Eight years ago, the amount was ATS 27.7 billion.

Kenya introduced the Public Service Superannuation Scheme in January last year, under which all civil servants now make monthly contributions towards their pension to tame bulging pension bills.

The state had attempted to transition from a non-contributory system to a contributory system as early as 2008, until 2020 when the Treasury Department published the change.

Last year, the Treasury showed officials will pay about 2.6 billion shash a month into the fund, making it Kenya’s largest pension scheme.

NCBA, Stanbic and credit unions bagged the deal last year to become stewards of more than Sh31.2 billion in annual pension contributions from public employees.

The three banks will provide the custodial services for three years, which upon expiry can be mutually extended for a further three years depending on the performance.

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