All government workers will pay for their retirement as one of their salary deductions beginning in January 2019.
The initiative by Treasury will see the civil servants stripped of the privilege they have had of enjoying a pension without paying for it.
They will each remit a 7.5% pension payment out of their basic salary in a bid to have the government cut back on operational costs.
The International Monetary Fund (IMF) has backed the initiative as part of its recommendation to reduce spending and increase tax revenues.
[caption caption="Treasury CS Henry Rotich issues a statement from his Finance House office"][/caption]
The government, as the sole contributor to the pension scheme, will also contribute 15% of the gross salary.
The new rules will apply to mainstream civil servants, teachers and members of the disciplined forces.
Treasury Principal Secretary Kamau Thugge explained that the scheme had to kick off in January 2019 and not September 2018 as earlier projected following consultations with stakeholders and intervention by Parliament that slashed the amount for the scheme from Ksh15 Billion to Ksh10 Billion.
"I know we have to do it this time around and I am really hopeful this time we will start it, hopefully in January," Dr Thugge stated.
In his address to Parliament, Treasury Cabinet Secretary Henry Rotich projected that the scheme would be able to raise double of the amount put into it.
"The Government has allocated Ksh15.3 Billion to the scheme in 2018/2019, projected to rise to Ksh33.8 Billion over the medium term," he stated.
[caption caption="Treasury CS Henry Rotich with PS Kamau Thugge during a past pre-budget reading event"][/caption]thug
- WARNING28 January 2023 - 10:07 am
- Tragic28 January 2023 - 9:24 am
- EXPLAINED28 January 2023 - 9:02 am
- dreams come true28 January 2023 - 8:26 am
- CHANGE OF TUNE28 January 2023 - 7:43 am
- demands28 January 2023 - 7:23 am
- Explanation28 January 2023 - 7:30 am
- Innovative28 January 2023 - 8:44 am
- Haste27 January 2023 - 8:07 pm
- Opposed27 January 2023 - 7:56 pm
- Heartbreaking27 January 2023 - 7:26 pm
- OPPOSITION27 January 2023 - 7:16 pm