Jobs, pension crisis as 35pc of State staff retire

What you need to know:

  • A public service report says more than a third of civil servants are above the age of 50 years.
  • Majority of employees in management positions (Job Group P and above) are over 46 years,
  • The government plans to introduce management trainee plan next year to fast-track graduates into executive roles, to ease effects of the ageing workforce.

Job and pension crisis will hit the civil service as 35 per cent of government workers are set to retire in the next decade, wreaking havoc on public finances.

A public service report released yesterday says more than a third of civil servants are above the age of 50 years, meaning about 63,000 civil servants will retire before 2027.

The most affected staff are in the senior management levels and technical cadres with critical skills and competencies.

The government plans to introduce management trainee plan next year to fast-track graduates into executive roles, trigger promotions and review blanket ban of fresh hiring to ease effects of the ageing workforce.

The Treasury will need to set aside billions of shillings as pension costs for the thousands of exiting workers who do not contribute for their pensions.

Estimates from the Treasury show that the annual pension bill will hit Sh55.6 billion in the current financial year ending June and will rise to Sh71.8 billion in the year ended June 2018, making it one the largest budget items. The bill has risen from Sh15 billion in 2002.

“Majority of employees in management positions (Job Group P and above) are over 46 years,” states the report.

“The challenge of ageing workforce has partly been addressed through retention in service beyond the mandatory retirement age to provide more time to mentor successors or recruit replacement.”

Only 19 per cent of the civil servants are aged 19-35years. Another 13.9 per cent are aged 36-40 years while 14 per cent of them are between 41 and 45 years.

Economists warn that the pension crisis will grow more acute because the government has delayed plans to have civil servants contribute monthly to a fund that will pay for their retirement.

The contributory pension scheme was mooted in 2009, but roll-out has been suspended more than thrice.