The Pensions Department of the National Treasury is conducting sensitization to create awareness about the Public Service Superannuation Scheme (PSSS), a defined contributory scheme for public service employees.
The government previously operated on a non-contributory Pension Scheme under the Pensions Act Cap 189 since independence that was fully financed through the Exchequer.
A new scheme was established by Public Service Superannuation Scheme Act No.8 of 2012 that commenced on 1st January 2021. The Retirement Benefits Authority (RBA) is established to regulate and oversee the growth of the Retirement Benefit Schemes (RBS) for the benefit of the members.
Retirement benefit schemes serve different objectives that include payment of benefits to members on attainment of retirement age, avail benefits to members on leaving service, provide disability benefits, alleviate old age poverty, and provide financial protection to members’ dependents on death while in service.
The PSSS is administered by a Board of Trustees regulated by the RBA and covers civil servants, teachers employed by the Teachers Service Commission, National Police Service, Prisons Service and National Youth Service and any other service determined by the Cabinet Secretary under PSSS Act.
Members of this new contributory scheme comprise employees serving on permanent and pensionable (P&P) terms of service and are aged below 45 years as at 1st January 2021, new employees who join the service on or after 1st January, 2021 on P&P, and employees whose services were transferred to the County Government and are currently covered under the Public Service Pension Scheme.
Employees who previously served on Temporary Terms of Service and contributed to National Social Security Fund (NSSF) were converted to P&P Terms of Service and were admitted into the new scheme whereas the contributions to NSSF ceased with effect from 1st January 2021.
The PSSS being a Defined Contribution Scheme, the Government and the employee will contribute to the scheme to fund the retirement benefits of the employee whereas the employee will contribute at the rate of 7.5 per cent of their monthly basic salary which graduated from 2 per cent in the first year (2021), 5 per cent in the second year and 7.5 per cent in the third year (2023).
The Government contributes a constant 15per cent of the monthly basic salary in respect of each employee while employees have an option to make additional voluntary contributions to the scheme above the mandatory 7.5 per cent of the basic salary.
Speaking during the sensitization meeting that was chaired by the Assistant County Commissioner Island Division Mr. Robin Ngeywo at the Mombasa County Commissioner’s Boardroom, the Principal Pensions Officer Mr. Douglas Asanyo said that the scheme is very portable because an employee can transfer accrued pension benefits from one registered scheme to another of a similar nature irrespective of the sector (public or private).
Asanyo said that members of the scheme may access retirement benefits earlier than their prescribed age in case of dismissal, resignation, ill-health, mortgage finance which is 40 per cent of the accrued savings, immigration or death.
“Upon retirement, a member may take a lump sum not exceeding one third of the balance in retirement savings account, however the additional voluntary contributions made into the scheme and the accrued interest can be withdrawn in full,” Asanyo said.
He highlighted the other advantages of the PSS scheme and said that after acquiring the lump sum, a member can make monthly or quarterly withdrawals calculated by an actuary on the basis of life span and paid from the fund.
“In the event that a member dies whilst in service before retirement, the beneficiaries will be receiving the member’s scheme credit and the insured benefit of up to five times the annual pensionable emoluments,” Asanyo added.
He added that there are plans to register all members’ biometrics to enhance security and also work on ensuring members receive their Pension Savings Accounts status monthly. The Kenya Retirement Benefits Sector (KRBS) falls under the social and economic pillars of the Kenya Vision 2030.
Source: Kenya News Agency