Pensions

Kenya: Rollout of Civil Servants’ Pension Plan Shelved Again

The rollout of the civil servants contributory pension scheme that was set to begin last month has been suspended once again to give the government time to resolve outstanding challenges.

The challenges include the pending appointment of the board of trustees and the reorganisation of the payroll to accommodate recent salary increments.

PAY RISE

“This month was loaded with pay increase adjustments, which hampered the start of the new scheme, but that does not mean it has failed.

“We will simply load and recover from the other months’ salaries.

“Trustees will meet to decide whether we recover once or spread it over a period,” Mr Shem Nyakutu, the director of Pensions at the National Treasury, said.

DEDUCTIONS

He added that the deduction of monthly contributions from members’ pay will begin in September but with July as the starting date.

The employees are, therefore, set for backdated deductions.

This may spark a fresh row with the employees.

AGREEMENT

The scheme had triggered a standoff between the Treasury and the Kenya National Union of Teachers, which insisted that it had not been consulted.

Union of Civil Servants of Kenya acting secretary-general Jerry ole Kina said all the parties had agreed on the suspension.

Under the new scheme, civil servants will contribute 7.5 per cent of their monthly pay and their employer another 15 per cent.

Former Retirement Benefits Authority chief executive Edward Odundo, who has been appointed chairman of the scheme’s board of trustees, said:

“Three unions nominated trustees but we were waiting for their appointment by the Treasury Cabinet secretary before we have a meeting.”

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