Auditor General: Treasury is to blame for delayed pensions

National Treasury

The National Treasury building pictured on June 15, 2023. An audit report has indicated that inefficiencies at the Treasury’s pensions department are to blame for delayed payments.

Photo credit: File | Nation Media Group

The Auditor-General has blamed inefficiencies at the National Treasury’s pension department for delays in the processing and payment of retirement dues to officers who have exited public service.

 In a performance audit report on the administration of public service pensions scheme before Parliament, the Auditor-General wondered why the department could not address issues like late submission of claims, incomplete and erroneous claims by government agencies, which have been blamed for the delayed processing, in time.

The processing and payment of the terminal benefits is supposed to take 21 days from the date a duly completed and supported claim is accepted at the pension department as per the citizen delivery charter. However, the audit report reveals that some claims take years.

The delayed processing leaves pensioners and their dependants unable to access their money in time to cater for their needs.

The audit indicates that in the event that a claim is returned to a ministry department by the pensions department, “there should be a communication indicating the exact requirement or omission that needs to be acted upon or rectified by either the pensioner or employer”. “The fact that a majority of the delayed claims did not have such a communication means that the reason for delay could only be attributed to inefficiencies within the pensions department,” the report states.

Officers who exit public service are expected to receive gratuities, pension and other allowances as terminal benefits for the number of years of service rendered.

The payment of pension and gratuity is governed by the Pensions Act and other related laws and aims to ensure a secure future for pensioners and their dependants, enabling them to access basic services such as health care, shelter and education.

Retirement benefits

The pensions department is responsible for processing and paying retirement benefits to retired presidents, MPs, military personnel, civil servants and teachers.

Inadequacies in the Pension Management Information System (PMIS), lack of procedures to identify deceased pensioners and dependants and delays in the operationalisation of the Contributory Pension Scheme have also been blamed for delays in the payment of claims.

“That claims are received by the pension department with errors or omissions and missing documentation means there is either lack of keenness by the receiving officers or possibility of loss of supporting documents during claim movement,” states the audit report.

This according, to the Auditor-General, affects the processing time since the erroneous ones are later returned to ministries and departments for correction while those with missing documents remain pending at the pension department to await the ministries or departments to avail these documents.

The Human Resource Policies and Procedures Manual for Public Service of 2015 provides that claims for normal retirement should be submitted at least nine months before an officer’s date of exit to allow verification of claims and correction of errors when the officer is still in service.

503 files

But a review of 596 normal retirement pension claim files revealed that only 503 had submission dates. A scrutiny of the 503 files indicated that only 10, about 2 per cent of the files, were submitted at least nine months to the exit date as required by the law.

The audit also revealed that although 106 (about 21 per cent) of the claims were submitted within nine months before the exit date, at least 290 (59 per cent) were submitted within a year after the exit date. Over 90 (about 18 per cent) of the claims were submitted over a year after an officer had retired.

A review of 731 claim files from 10 ministries and departments showed that 581 (about 79 per cent) of the files had complete information, including the capture date and the date the file was stamped as paid. However, 144 files had “either or both of these critical dates” missing, making it impossible to establish how long the files took to be processed. Some six claims “were indicated to have been paid before stamp date, which is irregular”.

Of the 581 files that had complete information 108 (19 per cent), were processed and paid within the stipulated 21 days, 377 claims (65 per cent) took between 22 days and six months while 79 (14 per cent) took between six months to a year. Some 17 claims took over one year to be processed and paid.