Reality will soon dawn on teachers after a government move that will see public officers contributing for their own pension starting July 2020.
Finance CS made the announcement that will see half a million public officers take a pay cut from July as they start contributing to their pension savings kitty.
The employees will see a 7.5 percent portion of their salaries sliced for onward remittance to the soon to be created Public Service Superannuation Scheme (PSSS).
The move follows Thursday’s directive by Finance secretary Ukur Yatani that PSSS be rolled out in the new financial year that starts on July 1.
Mr Yatani said the move was aimed at reducing the pension burden currently borne in whole by the exchequer, especially during the Covid-19 era that has depleted revenue sources.
Public officers do not contribute to their retirement upkeep, a move that will increase taxpayers’ pension burden to Sh109 billion in the year starting July from Sh15 billion in 2002.
In his national budget speech, Mr Yatani said, “to ease the pension burden on the exchequer, the national Treasury is committed to rolling out the Public Service Superannuation Scheme in the FY 2020/21.”
Pension budget has increased
The pension budget has increased by more than three-fold in the last 10 years from Sh25 billion in 2008/09 to Sh86 billion in 2018/19 financial year.
The Treasury forecasts it will need Sh109 billion in the year starting next July for pension payouts, rising to Sh153 billion in the year ended June 2022, reflecting a 20 percent rise.