By O’Brien Kimani
The much awaited new public servants pension scheme is expected to become operational by the end of this month.
The Public Service Superannuation Scheme will replace the current non-contributory Civil Service Pension Scheme with enhanced remunerations.
National Treasury Cabinet Secretary Henry Rotich says the government is currently setting up administrative units such as the board of trustees to identify fund managers to handle what is expected to be the largest retirement scheme in the region.
The government has been struggling with rising pension liabilities as the effects of an aging public service take toll on public coffers.
The annual pension bill is expected to hit 66 billion shillings this financial year from 15 billion shillings in 2002 exerting pressure on public coffers.
In 2009 the government increased the retirement age for public servant from 55 to 60 years to give it room to reorganize its pension bills. More than 20 thousand workers are expected to retire from the public service this year.
Rotich says under the new scheme, public servants will transfer their savings to new employers without losing their benefits. Those aged above 50 will be given the option to join the new scheme or remain in the old scheme.
Also facing a crisis is the education sector where thousands of teachers are also expected to leave the teaching fraternity, with Education Cabinet Secretary Dr. Fred Matiangi saying more than 5 thousand teachers will be hired in the current financial year.
Under the new scheme the government will contribute 15 percent of its payroll obligation to scheme while civil servants will add 7.5 percent.
They were speaking during the signing of a 36 billion shillings funding from the World Bank that will finance improvement of health and education sectors.