The Pensions (Amendment) Bill 2024 is, amongst other provisions, seeking to amend the Pensions Act Cap 189, to include an automatic cost of living adjustment to pensions earned by all retired public servants.

The Bill sponsored by Matuga MP, Hon. Kassim Sawa states that any Government officer entitled to pensions, gratuities, or other allowances shall receive an automatic cost-of-living adjustment increase when inflation rates justify such an adjustment.

“An officer who has been in service of the Government shall be entitled to an automatic cost of living adjustment increase to the pension, gratuities, or other allowances issued under this Act, where the rate of inflation is high enough to substantiate a cost of living adjustment increase,” the Bill reads in part.

According to the Bill, the adjustment will be calculated based on changes in the consumer price index, to be determined by the Kenya National Bureau of Statistics (KNBS), over 12 months ending on the 30th of June each financial year.

The Bill defines the consumer price index as a measure of changes in the prices of goods and services purchased by households, which directly or indirectly fulfil their needs and wants.

Additionally, it provides that the Cabinet Secretary will be responsible for publishing information regarding automatic cost-of-living adjustments in the Gazette.

It also defines the cost of living as the amount required to cover basic expenses, including housing, food, healthcare, clothing and education.