Teachers who are among civil servants are set to take salary cuts. The more than 300,000 Teachers will in January 2021 have their take-home pay slashed by 7.5 percent. The cuts will be part of their contributions to the pension savings scheme.
“The employees attached to ministries and State agencies will see a portion of their salaries sliced for onward remittance to the soon to be created Public Service Superannuation Scheme (PSSS). This means that State workers will cede about Sh. 2.4 billion monthly or Sh. 28 billion to the fund that will emerge as Kenya’s largest pension scheme,” the report said.
According to the National Treasury Cabinet Secretary Ukur Yatani the pension scheme will have a board and chief executive officer. The establishment of the scheme, he said, is geared towards reducing the pension burden that is shouldered by the exchequer.
“Membership to the scheme will be mandatory to all new entrants upon commencement of the Act and all employees aged below 45 as at the date. Employees aged 45 years and above will have an option to join the scheme by completing the Public Service Superannuation Scheme option form,” the National Treasury said in a statement.
Teachers were initially supposed to contribute 2 per cent of their monthly salary to the scheme in the first year, five per cent in the second and 7.5 per cent from the third year.
“The government will match the contributions with an amount equivalent to 15 per cent of every workers’ monthly pay. This will be equivalent to about Sh. 6.9 billion monthly contribution or Sh. 55.87 billion annually, turning pension expenditures to one of the largest budget items,” the report said.