Implementation of the Pension 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.

Th Act established the contributory Public Service Superannuation Scheme (PSSS) in line with the policy direction issued by the Government through the National Treasury Circular No. 18 of 2010.

Circular No. 18 of 2010.

The circular directed the conversion of all Defined Bnefits Schemes in the Public Sector to Defined Contributory Schemes.

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

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

Subsequently, new entrants shall be closed out of the current scheme 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 disciplined services personnel (National Police Service, Prison Service, and the National Youth Service (NYS)).

b) Membership

Membership of the scheme shall consist of the following categories:

1. Employees serving on permanemt and pensionable terms of service and aged below 45 years as at January 2021;
2. New Employees who join the Public Service on or after 1^st January, 2021 on permanent and pensionable terms of service;
3. Employees aged 45 years and above as at 1^st January, 2021 who opt to join the new contributory Scheme; and
4. Employees whose services were transferred to a county government vide Public Service Commission letter No. PSC/AON/91/XIV/ (25) dated 17^th 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 employee 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 1^st 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 and employee joins the scheme.

d) Employees not covered

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

1. Employees whose services are extended on Local Agreement Terms (contract) after retirement;
2. Employees engaged on Local Agreement Terms (contract); and
3. Employees aged 45 years and above as of 1^st January 2021 who do not opt to join the scheme will stay in the current scheme.

2. Implementation

a) Authorized Officers should ensure that:

i) Employees covered under the 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 1^st January 2021;

ii) Officers realign their salaries to comply with the provisions of s.19 (3 of the Employment Act, 2007 that 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 to effect the contributions.

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

i) Where the Accounting Officer fails to deduct member’s contribution, the sum will attract compound interest at the rate of the 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.

Relevant materials and requisite forms are available on the following websites:

1. The National Treasury – www.treasury.go.ke:
2. Teachers Service Commission – www.tsc.go.ke:
3. National Police Service Commission –  www.nationalpolice.go.ke;
4. National Youth Service– www.publicservice.go.ke .
5. Public Service Commission at www.publicservice.go.ke

You are requested to note the contents of thise circular and take necessary action.

JOSEPH K. KINYUA, E.G.H

THE HEAD OF THE PUBLIC SERVICE