The government has unveilled a plan to slash salaries of 530,000 civil servants including teachers and police officers.
A report by Business Daily on Tuesday, August 4 indicated that the civil servants would in January see their salaries reduced by 7.5% to cater for a new pension scheme soon to be created.
The publication further indicated that Treasury CS Ukur Yattani is set to launch the new scheme, dubbed the Public Service Superannuation Scheme (PSSS), on Wednesday, August 5 which will become the biggest pension scheme in the country.
The CS confirmed that the new scheme would be aimed at reducing pension pressure on the exchequer.
“Membership to the scheme will be mandatory to all new entrants upon commencement of the Act and all employees aged below 45 as at the date.
“Employees aged 45 years and above will have an option to join the scheme by completing the Public Service Superannuation Scheme option form," read a statement from the scheme in part.
The government had mulled the new scheme eight years ago and in 2017, it had prepared to have the contributions kick off as soon as pay review for civil servants took place.
In July 2017, government workers received a pay rise of between 17% and 30%.
The new scheme is set to rake in Ksh2.4 billion monthly revenue compounded to Ksh28 billion annually.
Pension Act
The Public Service Superannuation Scheme (PSSS) Act was assented to on May 9, 2012, with objectives including payment of retirement benefits to members of the Scheme and ensuring that members receive their payment when they are supposed to.
The Public Service Superannuation Fund will have a board of directors with the chairman appointed by the cabinet secretary.
Other members will include representatives from the Teachers Service Commission, Public Service Commission and the Inspector General of the National Police Service or his representative among others.
The board shall be tasked with the collection of member contributions, optimally investing the contributions collected, protecting members’ contributions as well as providing pension and other benefits to members of the Scheme and their dependants.
Teachers Payrise
This deduction comes at a time when the Kenya National Union of Teachers (KNUT) is facing off with TSC over denied pay rise and promotions.
Some 47,131 teachers in job group B5 were promoted by the Commission to job group C1 using their TSC's Career Progression Guidelines (CPG).
However, 32,556 missed out after the human resource commission for teachers stated that they fell under the Schemes of Service proposed by KNUT.
