Judges are set for pension payments that will factor in the increased cost of living, if Parliament adopts a proposed law.
The Judges’ Retirement Benefits Bill, 2025 is currently before Parliament for debate. It is sponsored by the Majority Leader in the National Assembly, Kimani Ichung'wah.
This is a pension payment that is increased based on the prevailing Consumer Price Index (CPI). The upward review is meant to ensure that retirees do not lose their purchasing power in comparison to the increases in the cost of goods and services.
How will the review be done?
The increase will be done on July 1 of every year on every specified pension. It (increase) shall be equal to the increase in the CPI as reported by the Kenya National Bureau of Statistics for the financial year.The increase will be between one percent and five percent and will significantly cushion them against the spiraling cost of goods and services.Retired judges will no longer enjoy the pension increment that retired public servants are entitled to under the Pension (Increase) Act.
How will judges contribute to their pension and at what rate will the State chip in?
Judges will contribute 7.5 percent of their pay while in active service while the State, as the employer, will pay an amount equal to 15 percent of each judge's pensionable pay. This contribution will be directly charged to the Consolidated Fund. The contributions will be wired to the yet-to-be-formed Judges’ Retirement Benefits Fund.
What are the financial implications of the preferential pension for retired judges?
The plan will further increase the pension bill and this will only strain the Exchequer’s ability to make timely payments of pensions. An impact assessment report of the implications of an inflation-based review of pensions is not yet out.
The Treasury has recently owned up to struggles in paying pensions and defaulted on Sh23 billion pension payments due to ex-public servants.
What is the basis for the preferential pension treatment?
Mr Ichung'wah says that an inflation-based review is key to realising the principles of the Constitution with regard to remuneration and benefits of judges. However, this proposal contravenes an earlier stand by the National Treasury and Parliament, which jointly argued that an inflation-based review of pensions for public servants is unsustainable. This argument led to rejection of a proposal to introduce inflation-based pension for all retired public servants.
Are there countries that apply inflation-adjustment on pension payments for retired public servants?
The UK increases the State pension every year under the ‘Triple Lock’ system. This review is done based on the CPI or the average increase in total wages across the UK for May to June of the previous year.
The increase is done every April. At least 30 countries in the European Economic Area also review pension payments to factor in inflation. These are also countries that have social security agreements with the UK to allow for cost-of-living increases of the State pension. These countries include Switzerland, France, Germany, Italy, Austria, and Finland.
