2 Position Paper on the Public Service Wage Bill Final-1-Edited by Professor Latest Version

8/10/2019 2 Position Paper on the Public Service Wage Bill Final-1-Edited by Professor Latest Version

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Position Paper on the Public Service Wage Bill


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Contents

1 Introduction ................................................................................................................. 3

1.1 Objectives of the Position Paper .......................................................................... 5

1.2 Definition of the Public Sector Wage Bill ........................................................... 5

2 Analysis of Trends in and Rise in the Public Service Wage Bill and Employment .... 7

2.1 Trends in Public Service Wage Bill 2008-2014.

2.2 Analysis of Public Service Wage Bill 2008-2014 ........................................................ 8

2.4 Employment Trends in the Public Sector:............................................................ 8

2.6 Trends in Public and Private Sector Pay: A Comparison................................... 11

2.7 Comparative Analysis of Kenya Public Sector Wage Bill with other African

states.......................................................................................................................... 122.9 Lesson from Kenyas comparison with other countries..................................... 14

2.10 Implications of the Wage Bill on Kenyas Fiscal Position............................ 153 Trends in Labour Productivity in Kenya Economy and Public Sector. ..................... 17

3.1 Linking Wages to Productivity ................................................................................. 17

3.5 Labour Productivity in the Kenya Public Sector ................................................ 18

4 The Role of Existing Legal and Institutional Frameworks in The Rising Wage Bill. ..

4.1 Setting Public Wages in a Democracy.20

4.3 Public Sector Wage Determination in Kenya: ................................................... 204.4 Collective Bargaining Agreements affect the government salary bill. .............. 21

5 Wage Bill Management Strategies: Policy Proposals .............................................. 22


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1 Introduction

1.1.1 Kenya faces a serious development crisis caused by very rapid growth of the

public sector wage bill that is now taking about one half the government revenue

(net of grants and loans), nearly one quarter of the annual national government

budget, and that took 13% of the GDP in FY 2012/13. This fiscal position is

unsustainable and it is out of line with the best international practices. A growing

wage bill puts pressure on the development and investment share of the budget

meaning there is less money to devote to infrastructure, hospitals, equipment

power generation, etc. It could put pressure on the government to borrow

because, it claims a disproportionate share of revenue, which could affect interest

rates and the exchange rate in ways not favourable to macro-economic stability as

envisioned in Vision 2030. It could hurt other recurrent expenses like the

purchase of medicines and books that are needed in our public hospitals and

schools. It could affect GDP growth poverty reduction and job-creation adversely

if wages claim an increasingly larger share of GDP at the expense of savings and

investment. None of this is good for the future of our country under Vision 2030.

1.1.2 Kenya is not alone in this Governments around the world are coming under

increasing pressure to provide improved services while simultaneously reducing

government spending. Many Kenya citizens believe that government productivity


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(i) Public hiring of additional teachers, police and nurses;

(ii) An increase in the average wage of employees in the civil service, public

universities and state corporations over the past decade;

(iii) Implementation of the Constitution of Kenya (2010) which created a bi-

cameral legislature and resulted in the increase in the number of legislatorsat the National Assembly and a new house , the Senate;

(iv) Establishment of the 47 counties which created posts of members of theCounty Assemblies, Executive Committees and many other positions at

the County Government Levels;

(v) The establishment of ten (10) Constitutional Commissions, two (2)independent offices and other state offices.

1.1.4 These developments have led to an increase in the public sector wage bill from

Kshs.239.9 billion in FY 2008/09 to Kshs.464.9 billion in FY 2012/13 that could

rise to an estimated Kshs.521.6 billion this FY 2013/14. Over the period under

review, the wage bill as a percentage of GDP increased from 11.0 % in FY

2008/09 to an estimated 13 % in the current FY(2013/14). The wage bill as a

percentage of government revenue has also increased from 49 % in 2008/09 to

55 % in 2012/13.

1.1.5 The Public Service Wage Bill is part of the overall recurrent expenditure of

G t d it th h t dit i ll


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1.3.2 Regarding the institutions covered, it includes personnel emoluments paid

to the Core Civil Service, Teachers Service, Health Services,

Disciplined Services, Judiciary Service, State Law Office, Parliamentary

Service, Public Universities, State Corporations, Local Authorities (which

became defunct following the Constitution of Kenya 2010), Armed Forces,

Constitutional Commissions and Independent Offices and Other State

Offices.Since the Constitution of Kenya (2010) has created a two-tier

level government structure (a national government and 47 county

governments). staff of the former Local Authorities and Ministry staff

deployed in the 47 counties constitute staff of the counties, and their

emoluments will for this financial year and in future be included in the

computation of the public sector salary bill.

1.3.3 Gross remuneration means total remuneration before any deductionsare made by the employer in respect of taxes, contributions of employees

to social security and pension schemes, life insurance premiums, union

dues, and other obligations of employees. Its computation excludes

employers contributions in respect of their employees paid to social

security and pension schemes and also benefits received by employees

under these schemes. It also exclude severance and termination pay.


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2

Analysis of Trends in Employment and Rise in the Public Service

Wage Bill

2.1 Trends in Public Service Wage Bill: 2008 -2014

It is advisable to begin with rise in the bill distributed by public service units.

Between FY 2008/09 and FY 2013/14, and the total annual salary bill required to

pay them over that period rose from Kshs239.9 billion in 2008/09 to Kshs512.6 in

2013/14. Some units, however, grew their wage bill faster than others.

Table 1 Public Service Wage Bill by Sub-Sectors FY 2008/09FY 2013/14

(Kshs billion)

FY 2008/09 FY 2012/13 FY 2013/14

Core Civil Service 48.5 62.1 23.6*

Disciplined Services 22.3 44.4 64.3

Security Services 29.3 41.3 42.4

Judiciary 1.14 4.60 6.50

Teachers Service 66.5 133.0 138.0

Public Universities 13.3 21.6 26.4

Defunct Local Authorities 9.3 17.3 -

Parliamentary Service 3.50 6.27 8.91


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2.2Analysis of Wage bill Composition and Growth:

As Table I indicates Kenyas total public sector wage bill nearly doubled over the

past five years as it went up by 92%.The Teachers service salaries constitutes the

largest component of the total public service wage bill. However, as evident from the

Table 1, the sub-sectors which recorded the highest increases in their wage bills in the

past five years were the constitutional commissions, the judiciary, and state

corporations. Wages and remuneration there rose faster than elsewhere. The large

increase in the counties wage bill in the current financial year (Kshs71.2b) compared

to the previous financial year (Kshs4.2b) is mostly explained by incorporation of

wages of staff of the defunct local authorities and of civil servants working in the

counties. The same phenomenon explains the decrease in the wage bill of the core

civil service in financial year 2013/14; i.e. some national public service salaries were

transferred to the county governments.

These trends in the cost of government salaries is alarming. Our projection of the

Wage Bill based on past growth (2008/09 to 2013/14) indicate a wage bill to GDP

ratio of 15.4% and a wage bill to revenue ratio of 64% by FY 2016/17. In other

words, if current trends continue salaries and remunerations in the public sector will

consume 64% of the tax revenue by 2016/17 exerting pressure on development

expenditure ( as stated earlier), debt servicing and other recurrent expenditure.

I dditi t th i i th b f t t l th th f th


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Corporations (17%). However, going forward, the proportion of wage employment

in the counties is expected to increase significantly as the counties employ more

workers, take on staff of the defunct local authorities and civil servants working in the

counties. Altogether as Table 2 show, public sector employment in Kenya grew by

14% between 2008 and 2013. This is a lot lower than the nominal rise in wage bill

(92%) cited above.

Table 2 : Distribution of Employment in the Public Sector 2008-2013

2008 2012 2013

1 Core Civil Service 112,000 123,498 123,897

2 Disciplined Services 81,693 93,366 98,894

3 Judiciary 2,532 4,294 4,439

4 Teachers Service Commission 236,800 260,800 274,729

5 Public Universities 17,012 20,648 21,527*

6 Local Authorities 40,900 37,700 -

7 Parliamentary Service* 300 390 4908 State Corporations 105,088 113,652 115,493*

9 Constitutional Commissions* 275 952 952


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sector employment in perspective with regard to the countrys total labour force,

broken down by public and private sectors, formal and informal sectors.


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Table 3: Size of Public Sector Employment in Total Employment (000)

2008 2009 2010 2011 2012

Labour Force (Million) 15.9 16.4 16.9 17.4 17.6

Private Sector 1,309 1,347 1,396 1,441 1494

Public Sector 597 612 620 643 655

Total Formal Sector 1,906 1,959 2,016 2,084 2,149

Self employed and

unpaid family workers

67.4 67.5 69.8 73.8 76.9

Informal Sector 8,039 8,676 9,332 9,919 10,511

Total Employment 10,012 10,703 11,418 12,077 12,737

% of Public Sector in

Total Formal Sector

31.3 31.2 30.7 30.8 30.4

% of Public Sector in

Total Employment

6.0 5.7 5.4 5.3 5.1

Source: Economic Survey 2013 (KNBS)

2.5 Trends in Kenya Public and Private Sector Pay: A Comparison

2.6.1 Given the prominent role played by the private sector in employment, it may

be worthwhile to compare private sector wages with those of the government.A Study done for Kenya Salaries and Remuneration Commission last

year by KIPPRA on the wage differences between the privates and public


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internationally desirable levels. Wage bill as a percentage of GDP has risen 11%

(2008/09) to 13% ( 2012/13) as compared to the desirable level of 7%: wages

took 55% of total tax revenue in FY 2012/13 as compared to 35% of globally

recommended level.

This trend is clearly unsustainable if Kenya is to achieve the goals it has set itself.

It is worth noting that Kenyas wage bill is taking a greater share of revenue than

in such countries as Liberia that are emerging form conflict.

Table 5: Selected Sustainability Ratios2008/09 2009/10 2010/11 2011/12 2012/13 Internationally

desirable

levels

Wage

Bill/GDP

11.0 11.4 11.3 11.0 13.0 7

Wage Bill

/Revenue

49.3 47.3 47.1 48.1 55.0 35

Source: National Treasury

2.7 In FY 2012/13 Kenya was doing worse according to these standards than herEast African neighbours- Rwanda, Uganda, and Tanzania. This can be seenfrom Table 6 below. Kenya was getting closer to the levels of Botswana and South

Africa which are experiencing a fiscal stress. Kenya must ensure this trend stops.

At present Swaziland with the highest wage bill to GDP ratio in Africa is

experiencing low growth, increasing poverty, and a stalemate over an austerityprogramme agreement with the IMF.


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2.8 Lessons from of Kenyas comparison with other countries

2.9.1 Public sector wage bill as % of GDP:This ratio can vary between 5% and 25%,

with many countries around the 10% mark. The ratio depends on the relative

involvement of the state in the economy. Developing countries tend to have

smaller governments relative to GDP and consequently a lower ratio. Historically

has a lower percentage of the wage bill to GDP but that is now changing. Kenya

is now among those with a higher percentage.

2.9.2 Public sector wage bill as % of total public sector spending:In order to deliver

quality public services, governments need to spend money on goods and services

as well as wages and salaries. As a rule of thumb, when this ratio rises over 25%,

governments risk reducing their effectiveness by squeezing non-wage expenditure

such as goods and services, maintenance, and capital expenditure. In practice, this

means that hospitals will lack medicines; schools will go without textbooks, etc.

2.9.3 Average government wages compared to per capita GDP: Another way of

comparing how well countries use wages for public service as compared to public

welfare generally is to calculate average central government wages as a multiple

of GDP per capita. According to World Bank figures, Africa has one the highest

figures of public sector wages in multiples of GDP per capita. It was estimated at

5 9 in 2004 which is higher than Asia or Latin America using Kenyas 2011


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2.9.5 These percentages or ratios should be compared to the average for the countys

region, as well as with countries at similar levels of development farther afield. It

is important to note that policy recommendations cannot be "read off" the

employment and wage statistics alone. A complete picture needs to be built up

and discussed with all relevant stakeholders before designing an appropriate

employment and wage reform agenda.

2.9 Implications of the Wage Bill on Kenyas FiscalPosition

2.10.1 Recent Data (Table 7 below) shows that the government fiscal position has been

deteriorating with increase in deficit financing. Since the Government can only

finance from taxes or borrowing (domestic and external), the large demands of

financing government spending on public service wages appears to have

contributed to the increase in deficit financing and to additional domestic

borrowing.

Table 7 Deficits, Debt Stock, and Interest Payments on Domestic Debt (Kshs

billion)

Kshs billion) 2009 2010 2011 2012 2013

Domestic Debt 518,507 660,268 764,222 858,830 1,050,556

Interest Payments 45,949 57,381 70,497 82,339 110,184

External Debt 504,455 528,792 676,914 716,588 800,025


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3 Trends in Labour Productivity on the Kenya Economy and PublicSector.

3.1 Linking Wages to Productivity: Wages are a cost to employers in this case the

government. They are also a tool for motivating workers to higher productivity. To

employees on the other hand wages represent their standard of living, self-fulfillment

and an incentive to acquire skills for the market. Reconciling the contradiction

between the interests of employers and workers is the first step to formulating a

balanced and equitable wage policy. Ignoring the contrasting interests of employers

and employees is to depoliticize changes in wage distribution by attributing

fundamental wage movements to changes in productivity trends and not to changes in

the balance of power within the labour market. Yet both are important factors.

3.2 Still productivity of employees ought to be prime concern of the government in

deciding whether it is getting value for money from its labour force. Higher

productivity growth in the economy implies sustainable change in wage levels.

This means the economy or sector can only increase wages with corresponding higher

labour productivity growth rate, if we use the productivity criteria. Therefore, the

country must strive to increase and manage its productivity levels to match

commensurate changes in wages. Trends of labour productivity indices in the


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3.3 Table 8 below shows the Labour Productivity Indices of Kenya economy as awhole using these five indicators.

Table 8: Trends of Real National Level Labour Productivity Indicators in Kenya

2001-2012

Source: PCK Computations

3.4 As the table shows, output indices indicate an approximate 51 percent increase

In national output over an eleven year period. The wage value added productivity,

however, has declined over the period under review, from an index 1:00 in 2001 to

an index of 0:455. This indicates wage rate increases higher than the wealth

created in the economy. Although, labour input index increased by 28 percent

during the period, the labour productivity index recorded only 18 percent growth

rate. There seems a disconnect between the labour input index and the increase in

labour force

Economy 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Output index 1.000 1.007 1.038 1.080 1.136 1.200 1.275 1.288 1.321 1.397 1.450 1.514

Wage Value

Added

Productivity 1.000 0.940 0.889 0.827 0.798 0.732 0.677 0.649 0.577 0.535 0.490 0.455

Labour inputindex 1.000 1.013 1.030 1.052 1.078 1.108 1.139 1.159 1.192 1.229 1.269 1.281

Labour

productivity

index 1.000 0.994 1.008 1.027 1.054 1.083 1.119 1.112 1.108 1.137 1.143 1.181

Labour share 0.397 0.423 0.447 0.480 0.498 0.543 0.586 0.613 0.688 0.743 0.811 0.874


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Table 9 above shows a marginal increase in the public sector output index of 30

percent over an eleven year period. Similarly, the labour productivity index

indicates marginal increase over the period. The wage value added productivity index

declined from index 1:00 in 2001 to index 0.548 in 2012. This illustrates the less returns

from every shilling the government spent on own employees by 0.4. The labour share in

the public sector exhibit increasing trend well above the 0.4 mark.

This is a worrying trend since the government wage increases is far ahead of the wealth

created in the sector. The government pays beyond the lagging growth in labour

productivity. The agitation for increased wages therefore calls for introduction of a

flexible, performance-based and competitive wage structures where salaries reflect the

job value and performance, i.e. productivity.


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4

The Role of Existing Legal and Institutional Frameworks in The

Rising Wage Bill.

4.1 Setting Public Wages in a Democracy: In most democratic countries wagelevels are set in part by legal and institutional regulations. Kenya is no

exception. In relation to wage fixation, the Kenya Constitution of Kenya 2010Article 41(1) under the Bill of Rights, states that every person has the right to fair

labour practices, fair remuneration and collective bargaining. The Labour Relations

Act of 2007 and Labour Institutions Act of 2007 in particular have provisions for

methods of wage fixation including the process of collective bargaining. Section 43

of the Labour Institutions Act empowers the minister responsible for Labour toestablish general, agricultural and sectoral wages councils. The Councils are

expected to advice the Minister on appropriate levels of minimum wages and other

statutory terms and conditions of employment. This has affected Public SectorWage growth.

4.2

Other national laws that bear on the Wage Bill include The Public ServiceCommission Act 2012, The Teachers Service Commission Act 2012, The Public

Finance Management Act (2012) and the Kenya Defense Forces Act. Being a

member of the International Labour Organization (ILO) Kenya has ratified one of

the fundamental instruments namely the ILO Convention number 98 on collective

bargaining. The other special Convention on Collective bargaining with specific

reference to negotiation in the public sector is number 151 whose principles can

guide in wage determination.


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arguments without considering other variables in the economy that impinge on

Industrial Relations.

4.4 Collective Bargaining Agreements also affect the government salary bill.

Examples here include terms and conditions of employment agreed upon through

collective bargaining process between the management of Kenyatta National

Hospital and Kenya Union of Domestic, Hotels, Educational Institutions, Hotels

and allied workers (KUDHEIHA), Union of Kenya Civil Servants (UKCS) and The

Public Service Commission, The University Academic Staff Union (UASU) and the

Public university forum for wage negotiation, The Kenya Union of Nurses (KUN),

The Doctors, Pharmacists and Dentist Union (KMPFDU) and the Ministry of

Health to mention just but a few.

4.5 Finally, taking into account the fact that social dialogue is central and forms

one of the four strategic objectives of the ILO, the debates on the wage Bill will

require to be subjected to deep social dialogue between Government, the

representative of employers, and workers organizations and citizens.


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5 Wage Bill Management Strategies: Policy Proposals

5.1 More Growth: One of the best ways to reduce the government wage bill as a

percentage of GDP (which is what Kenya desires) is to ensure GDP growth

rises much faster than growth in wages paid to public servants. If GDP is

growing rapidly, revenues will also generally rise. If they rise faster than wages,

the wages to revenue bill ratio will also fall. To solve the problems dealt with in

this paper, Kenya must look critically on new ways to accelerate GDP growth to

the double digit level suggested in the Jubilee coalition manifesto.

5.2 Reforms on the budgeting process. These should include:

making the budget process more responsive to priorities;

making management practices more flexible, such that defined priorities areeasier to achieve;

Strengthening competitive pressures among providers of public services and,

where not incompatible with equity considerations, containing the demand for

public services (Curristine et.al 2007).

Since effective reform cannot be confined to central government, fiscal relations

across levels of government must be such as to ensure that sub-national


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iii. Retrenchment of temporary or seasonal workers.

iv. Enforcement of retirement age.

v. Freezing of recruitment.

vi.

Elimination of guaranteed entry to the civil service from the educational ortraining system.

vii. Suspension of automatic advancement.

viii. Voluntary incentives - induced retirement of surplus workers.

ix. Containment of wages (restraints or freezes).

x.

Dismissal of serving civil servants.

5.4 Recruitment freeze

In this decade, the select countries have resorted to the policy of recruitment freeze

to control growth of personnel numbers. Before the introduction of this policy

measure, there was guaranteed entry into the government payroll for large numbers

of pre-service trainees in all kinds of public training institutions. This policy has

been adopted to varying degrees of effectiveness in the select countries (see Table

10).


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Table 10: Timing, Policy Specifics and Impact of Recruitment Freeze in

Selected Countries

COUNTRY YEAR POLICY SPECIFICS IMPACT REMARKS

Kenya 1992 Total freeze except for

teachers and replacement ofhealth workers.

High Numbers in civil

service have,reduced from

272,000 in 1993 to

216,000 in 1997.

Tanzania 1992

1995

Recruitment restricted to

replacements, and professionaland technical personnel in

essential services (teachers,

health workers, police and

prisons), and to be approvedby Head of the Civil Service.

As above, but replacements

also subject to approval by theHead of Civil Service.

Low

High

Enforcement

mechanisms notclarified.

Enforcement

mechanismsclarified.

Uganda 1990

1994

Only scarce professionals

(engineers, doctors, etc) to be

recruited with specificapproval of the Head of the

Civil Service.

Old establishment abolishedand a new one to be created.

Recruitment restricted to new

bli h

Low

High

Compliance not

enforced.

Complianceachieved with new

establishment

l


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5.5 Rationalizing the Payroll: This has already begun in the current census of public

sector employees to establish who is actually on the government labour force.

Good practices in managing and controlling personnel costs revolve around:

Controlling the numbers on the government payroll(s); Imposing a resources envelope for compensation of personnel;

Enforcing controls to restrict expenditures within the resources envelope;

Eliminating expenditure leaks that allow extra-budgetary expenditures on

personnel; and

Installing improved systems.

5.6 Further measures to rationalize the payroll measures include the following.

Flushing out ghost employees;

Special payroll audits;

Recruitment freeze;

Slicing away redundant unskilled workers;

Abolishing vacant posts

Rationalisation of roles, and functions;

Application of staffing Norms;

Zero-base reconstitution of the establishment;

Firm wage bill freeze;

Eliminating compensation allowances outside the salary payroll;


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example, there is a 1998 proposal in Kenya to cut the teaching force by a quarter

(63,000 out of a total 244,495) by applying a pupil: teacher ratios of 40:1 for

primary schools teachers and 30:1 for secondary schools teachers. Furthermore,

through the use of the ratios, areas and institutions that are overstaffed or

understaffed are identified and personnel redeployed on that basis.

1. Country case studies

Box 1

Botswana Wage Bill

The International Monetary Fund(IMF) revealed that the overriding fiscal policy challenge forBotswana is to reduce the size of the government (as a share of GDP) at a time when unions are

viewing further job cuts with a lot of suspicion since the government remains the main employer

in the economy. In 2011/12 and FY2012/13 the Central Government compensation of employees

as a % of GDP was 12.2% and 12.8% respectively (Botswana Article IV consultation, IMF 13/

296).The Botswanas wage bill is high by international standards, which combined with

subsidies and transfers, account for about 50 percent of total expenditures, thereby limiting the

room for fiscal policy flexibility. Thus the targeted reduction in the expenditure-to-GDP ratio by

2.5 percentage points, reflecting mainly reduced wages and subsidies, is appropriate. The

budgets emphasis on the need to rebuild fiscal buffers, improve the quality of spending, and

buttress medium-term fiscal consolidation, is also well placed


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deficit. Ambitious structural reforms are needed to boost productivity and

employment.

x) Efficiency measures (cost effective staffing norms/ratios).

Optimal utilization of existing human resources norms and standards to guidethe efficient, equitable, effective and sustainable service delivery can be

considered as one of the approaches for managing the Countrys public wagebill.

xi) Further analysis is recommended on staffing levels in the CountyGovernments, especially with a view to rationalizing with staff absorbed

from the defunct Local Authorities and Civil Servants deployed in the

counties.

xii) The judicial awards on substantive and procedural issues must be guided by

existing income and wages policies and Ministry of Finance guidelines issued

from time to time.

xiii) All terms and conditions of employment must be subjected to Industrial

Relations policies and wages guidelines issued by the Ministry of finance

prior to registration by the Industrial Court and implementation.

xiv) The Salaries and Remuneration Commission should strive to always intervene

at the right time and guide parties prior to their engagement and conclusion of

collective bargaining agreements.


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2 Annexes

Annex I: Definition of Terms Relating to Pay and Wage Bill

Award Means an award on wages made by the Industrial Court

Wages Guidelines means wages guidelines issued from time to time by the

Ministry of Finance to guide Industrial Court Judges in

making wage awardsIndustrial Relation CharterMeans a tripartite agreement between the government, the

most representative employers organization and the most

representative employees organization for the regulation of

labour and industrial relations in Kenya.Employer Means any person, public body, firm, corporation or

company, who or which has entered into a contract of

service to employ any individual and includes the agent,

foreman, manager or factor of such person public body,firm, corporation or company.

Trade Union This refers to a registered workers organization whose

major function is championing the interest of their member

and wage negotiations form their core function.Recognition Agreement Means an agreement in writing made between a trade union

and an employer, group of employers or employers

i i l i h i i f h d i


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Remuneration for labour input in production of goods and services is referred to aswages, allowances, monetary and non-monetary benefits. Salaries and wages is

compensation to employees for services rendered and paid for monthly in Kenya.


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Basic- and gross-pay

Basic pay refers to the component of remuneration that is the starting point of pay which

is subsequently adjusted in a pre-defined progression structure. Allowances are

components of pay which may be fixed and paid monthly as part of salary or non-fixedpaid to employees when they perform specified duties in or out of their regular workstations. Some of the fixed allowances which are paid as part of salary include, housing

allowance and commuter allowance. The sum total of basic pay and allowances paid as

part of monthly salaries is referred to as gross pay.

Allowances

Other allowances e.g. per diem, medical allowance, ex-gratia assistance, meals and

entertainment allowances, are paid not as part of monthly salary but as entitlements toemployees in specified work-related descriptions. Senior public officers are entitled to

non-monetary benefits which are costs to the employer such as pay for domestic servant

and security. Other costs to the employer include training cost on serving officers,uniform and clothing, pension pay to retired officers.


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Annex 2: Actual /Projected Pension Expenditure (Millions)

SERVICE 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Civil Service,Parliament,Judiciary, Police,

Teachers 22,598.49 23,762.46 24,517.00 20,363.66 24,833.28 32,935.83 36,258.77 36,258.77 36,258.77

Kenya Defence

Forces 2,567.17 3,538.96 3,392.93 3,869.25 1,806.43 5,231.06 9,595.60 9,595.60 9,595.60

TOTAL CFS

PENSIONS 25,165.66 27,301.42 27,909.93 24,232.91 26,639.70 38,166.89 45,854.37 45,854.37 45,854.37

Teachers Award 10,020.00 3,340.00 - -

PSSSContributions - - - - - - 13,825.91 14,517.21 15,243.07

GRAND TOTAL 25,165.66 27,301.42 27,909.93 24,232.91 26,639.70 48,186.89 63,020.28 60,371.57 61,097.44

2 Position Paper on the Public Service Wage Bill Final-1-Edited by Professor Latest Version

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