Kenya 7.5 % contribution pension scheme for public servants

Teachers, Civil Servants, Police Mandatory 7.5 % Pension Contribution

It is now mandatory for Civil servants, teachers and members of the disciplined service to be deducted 7.5 % pension contribution towards the now gazetted public service superannuation scheme.

The pension scheme plan which kicks into effect from January 1st, 2021 will affect teachers, civil servants, the National Police Service, the Prison Service, and NYS.

Details of the Contributional Pension Scheme

The 7.5 % pension contribution scheme commences on 1st, January 2021 and will cover all public service employees on permanent and pensionable terms who are aged below 45 years.

Those 45 years and above can opt to join the scheme.

All new employees below 45 years and on permanent and pensionable basis, as of January 1st 2021 will automatically join the pension scheme.

In the first year, employees will contribute 2% of their basic salary, 5% in the second year, and 7.5% in the third and following years.

The government will contribute 15% of the employee’s basic pay towards the scheme starting from 1st January 2021.

The contributions, partly from the employee and 15% from the employer, will continue until the employee retires.

The Widows and Children’s Pension Scheme (WCPS), 2% of basic salary normally paid by male employees, will stop immediately the employee joins the scheme.

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The contributory pension scheme does not cover employees on contract terms.

Employees above 45 years as of January 1st 2021 are not automatically eligible unless they chose to opt in.

How the Pension Scheme will be Implemented

Here is a summary of what the Head of the Public Service, Joseph Kinyua in a notice to relevant stakeholders had put forward;

Relevant authorities to ensure that public officers will comply with provisions of employment act which requires one not to take home less than a third of the salary.

The Ministry of Public Service and Gender will ensure there is a check-off mechanism to effect the employees contributions.

Relevant Acounting Officers shall then remit both the employee and government contributions by the 10th of the next months.

Failure to deduct and remit members’ contributions in any months shall attract a compound interest of 3% per month on the sum

Emlpoyees records will be converted and centralized to the Public Service Superannuation Scheme through the IPPD system.

The scheme together with stakeholders will sensitize and educate the public service through various forums prior to the commencement date.

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