Public servants will begin footing their pension bill starting January next year as the National Treasury seeks to hedge the exchequers budgetary obligations amid shrinking revenues.
In a circular released yesterday, Treasury Cabinet Secretary Ukur Yatani said the move to have public servants contribute to their pension scheme was long overdue and would save the taxpayer billions of shillings.
Mr Yatani said the taxpayers’ pension wage bill had 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 statement.
“It is clear this situation cannot wait any longer, therefore giving urgency for the roll-out of the contributory scheme.”
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The contributory scheme, Public Service Superannuation Scheme Fund, is in keeping 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.