KENYA
Kenyan Public Servants will start contributing to their retirement benefits in May, boosting the Government’s effort to tame its rising wage bill as revenue collections continue to fall.
Details contained in the draft Budget Policy Statement show the National Treasury has now committed to gazette the much delayed Public Service Superannuation Scheme (PSSS) Act 2012.
In a statement, the Treasury noted that the Act was assented to on 9 May, 2012 but had never been put into operation.
Under the new date of 1 May, Public Servants will contribute 7.5 per cent of their monthly pensionable salary similar to the model used in the private sector.
“Every member shall contribute to the PSSS at the rate of 7.5 per cent, which is deducted from his or her monthly pensionable salary while the Government makes a contribution for each member at the rate of at least 15 per cent of the member’s monthly pensionable salary,” Treasury said.
PSSS also allows a member to make voluntary addition to their contributions towards their retirement benefits.
The move will reduce the take-home pay of Public Servants, something they have resisted for more than a decade.
Chief Secretary of the Treasury, Ukur Yatani (pictured) has announced plans to almost halve the Budget deficit in the next four years to 3.3 per cent of Gross Domestic Product from an estimated 6.3 per cent in the fiscal year ending in June. This is amid spending pressures and depressed tax collections.
The Treasury noted that the increasing number of retired officers and the increased life expectancy rate had significantly contributed to the increased Government wage bill.
A 2009 actuarial study commissioned by the Government found that there was a contingent pension liability of Sh499 billion ($A7.2 billion) at the time. The liability nearly doubled to Sh990 billion ($A14.3 billion) in 2014.
Nairobi, 22 January 2020
