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©Hein du Plessis/HelpAge International

Kenya:

Civil Servants Get New Pension Plan 

By Ken Ramani and Noel Wandera, The East African Standard 

February 13, 2004

Civil servants and teachers will have a contributory pension scheme beginning in July, the Government has announced. 

"A Cabinet decision has already been made for the introduction of the scheme," the Director of Personnel Management (DPM), Mr Simon Njau, said. 

Over the years, the Government has been paying for its employees, in which only those in Job Group E and above and who have attained the age of 50, qualify for pension upon retiring. 

"Reforms on the pay and benefits of civil servants are essential incentives for performance improvement," said Njau yesterday during an economics symposium sponsored by the Institute of Certified Public Accountants of Kenya (ICPAK) at a Nairobi hotel. 

The recent reforms in this area have included implementation in full of the Kipkulei Civil Service Salary Harmonisation Commission's recommendations on housing allowance for civil servants and teachers with effect from July 1, 2001. 

The Government has also enhanced salaries and allowances for permanent secretaries, accounting officers and constitutional office holders. 

In a speech read by Njau, the Head of the Civil Service and Secretary to the Cabinet, Mr. Francis Muthaura, said the previous scheme for civil servants was non-contributory and was fully paid for by the Exchequer. However, in the new one, both the employees and employer will contribute a certain percentage. 

The scheme will also be flexible in the sense that if a civil servant changes jobs, he does so with his contributions, unlike in the past when one would lose the benefits. 

Public universities have a contributory pension scheme in which both the academic and non-academic staff are deducted 2.5 per cent of their basic salary while the universities contribute between 20 and 27.5 per cent. 

Kenya Union of Post Primary Teachers (Kuppet) welcomed the announcement but cautioned that it would oppose any political appointees "as they may not represent the interests of contributors". 

Secretary-general Wanyonyi Buteyo said Kuppet and the Kenya National Union of Teachers (Knut) should be given automatic membership in a board of trustees to run the fund. 

He said the scheme could become a realistic investment plan for Government employees and hoped that it was not a ploy to swindle the workers of their money. 

"Since we represent about 50,000 graduate teachers and Knut represents about 185,000 primary school teachers, we should have a strong representation in the board," said Buteyo. 

The unionist added that the move "is an idea that has come rather too late. But we welcome it fully because it shows Narc is thinking seriously about the welfare of teachers." 

Buteyo said the funds should be invested in projects that could earn pensioners more money and enable those without houses to acquire mortgages. 

A source at the DPM said the Government was working on modalities of setting up a board of trustees to run the pension scheme, independent of Treasury. 

Muthaura said the Government used Sh8.2 billion to finance the voluntary early retirement involving 42,132 civil servants in jobs groups A-G in 1993. 


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