Implementation of the Pension Scheme for Civil Servants, Teachers and Disciplined Services

                                  

Implementation of the Pension Scheme for Civil Servants, Teachers and Disciplined Services

 REPUBLIC OF KENYA

EXECUTIVE OFFICE OF THE PRESIDENT

HEAD OF THE PUBLIC SERVICE

Implementation of the Public Service Superannuation Scheme for Civil Servants, Teachers and Disciplined Services.

Effective Date:1st January,2021

IMPLEMENTATION OF THE PUBLIC SERVICE SUPERANNUATION SCHEME FOR CIVIL SERVANTS, TEACHERS AND DISCIPLINED SERVICES

The Public Service  Superannuation  Scheme  Act, 2012  (the ‘Act’) was enacted as part of Government  reform  initiatives  in  the  pensions   sector.

The Act established the contributory Public Service Superannuation  Scheme (PSSS) in line with the policy direction issued by Government through the National

Treasury Circular No. 18 of 2010.

The Circular directed the conversion of all Defined Benefits Schemes  in the public sector to Defined Contributory Schemes.

The objective was to align public service pension schemes with best practice in the retirement benefits industry.

The Public Service Superannuation Scheme (‘PSSS’ or ‘Scheme’)  will commence on 1st January, 2021 as appointed through Legal Notice No. 156 published in the Kenya Gazette Supplement of 12th August, 2020.

Subsequently, the current scheme will be closed to new entrants and the accrued benefits for those who join the new Scheme will be calculated  and paid into the Scheme.

1.    Features of the Scheme

a) Coverage

The Scheme will cover all civil servants, teachers and the disciplined services personnel (National Police Service, Prison Service and National Youth Service).

b)   Membership

Membership of the Scheme  shall comprise the following categories:

i)    Employees serving on permanent and pensionable  terms of service and aged below 45 years as at 1st January, 2021;

in)    New employees who join the Public Service on or after 1st January, 2021  on permanent and pensionable terms of service;

iii)   Employees aged 45 years  and above as at 1st January, 2021 who opt to join the new contributory Scheme; and

iv)   Employees whose services were transferred to a county government    vide Public Service Commission Letter No. PSC/AON /91/XIV/ (25)  dated   17th May, 2016, are currently covered under the Public Service Pension Scheme, and fall under the first or third category above.

c)   Contributions

i)    The PSSS is a Defined Contributory (DC) Pension Scheme.

Employees will contribute 7.5% of their basic salary.

The  rate  of contribution will be graduated at the following rates:  2% in the first year; 5% in the second  year; and 7.5%  in the third year.

Employees will have the option to make additional voluntary contributions above the mandatory 7.5% of their basic salary.

Where an employee takes  this option, the Government will not increase its contribution.

ii)   The employer will contribute  15% of the employee’s basic salary.

iii)  The  provisions in (i) above will apply to staff on secondment and the  31% pension contributions will cease with effect from 1st January, 2021 for those who join the Scheme.

iv)  Contributions to the Widows and Children’s Pension Scheme (WCPS) and  National Social Security Fund (NSSF) will cease from the date an employee joins the scheme.

d)  Employees not covered

The following categories of employees will not be eligible to join the Scheme:

i)     Employees whose services are extended on Local Agreement Terms (contract) after retirement;

ii)   Employees engaged on Local Agreement Terms (contract); and

iii)  Employees aged 45 years and above as at 1st January, 2021 who do not opt to join the Scheme will remain  in the current scheme.

2.    Implementation

a)    Authorized Officers should  ensure that:

i)     Employees covered under this Scheme who are not on permanent and   pensionable terms of  service, and are contributing to the National Social Security Fund are admitted to permanent and pensionable terms of service with effect from 1st January, 2021;

ii)   Officers realign their salaries to comply with the provisions of s.19 (3)  of the Employment Act, 2007 which requires an employee to take home  not less than one third of their salary.

b)    The Ministry of Public Service and Gender shall provide a check-off facility to effect the contributions.

c)    Accounting Officers shall remit employee and government contributions by the 10th day of the next month following the due date, provided that:

i)    Where the Accounting Officer fails to deduct a member’s contribution, the sum will attract a compound interest at the rate of three percent per month; and

ii)   Where the Government fails to make employer contributions in any month, the sum will attract a compound interest at the rate of three percent per month.

d)   Employees’ records will be centrally converted to the Public Service Superannuation Scheme through the IPPD system based on the parameters set out in the Act.

MDCAs shall thereafter verify the records to ascertain their correctness.

Prior to the commencement date, the Scheme in conjunction with the stakeholders will hold education and outreach sensitization forums across the Public Service.

The relevant materials  and  the requisite forms are available on the following websites:

(i)     The National Treasury at www.treasury.go.ke;

(ii)    Teachers Service Commission at www.tsc.go.ke;

(iii)    National Police Service Commission at www.nationalpolice.go.ke;

(iv)    National Youth Service at www.nys.go.ke; and

(v)     Public Service Commission at www.publiceservice.go.ke

You  are  requested to note the contents of this Circular and take necessary action.

JOSEPH K. KINYUA, E.G.H.
THE HEAD OF THE PUBLIC SERVICE

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