Members of the National Assembly now want pension to be paid within three months after a worker retires.
While debating amendments to the pension law, the MPs also proposed pension packages to be paid within 90 days after an employee retires.
Mandera West Constituency Member Adan Haji during the debate stated that defaulting employers should be penalized.
“Pensionaries should be paid full salary until they get their pension in their accounts,” he said.
Employers delaying disbursement of workers’ pension packages will be required to pay monthly interest on the principal amount if an amendment to the Pension Act is enacted into law in its current form.
The National Treasury last year raised alarm over state owned entities delaying payment of pension whenever employees retire.
This comes after some government agencies owed their former employees a total of 20 billion shillings in unpaid pension packages.
MPs are also calling for decentralization of pension offices to facility prompt payment of pension.
If enacted into law in its current form, employers will be required to have a seamless pension process that eases access of pension by the next of kin in case the principal holder dies.