This archive report was first published on 6 August 2020.
As the country grapples with shrinking revenues, the National Treasury has decided to make public servants contribute to their pension scheme, starting from January next year.
The move, announced by Treasury Cabinet Secretary Ukur Yatani, is expected to save the taxpayer billions of shillings.
According to Yatani, the taxpayers' pension wage bill has risen unsustainably, with the figure expected to hit Sh100 billion in the 2020/21 financial year.
“The pension wage bill that rose from Sh27.9 billion in the Financial Year 2013/14 to Sh86.7 billion in 2019/2020 is projected to cross the Sh100 billion mark in the current financial year,” said Yatani in a statement.
Yatani emphasized that the situation cannot wait any longer, making it urgent to roll out the contributory scheme.
The Public Service Superannuation Scheme Fund, a contributory scheme, is in line with a pension harmonisation policy that introduced pre-funding or fully funded complementary pension schemes for public servants.
“The expected fund income of over Sh3 billion monthly presents resources that will not only stimulate the economy, but will also support the big four agenda,” said Yatani.
