Implementation of the contributory pension scheme for civil servants will start soon, Public Service, Youth and Gender Affairs Cabinet Sicily Kariuki said on Tuesday.
The scheme was to be rolled out in 2012.
“The National Treasury has indicated willingness to implement it. We need the scheme as early as today in order to begin planning,” Ms Kariuki said at an event for the signing of a collective bargaining agreement between her ministry and the Union of Kenya Civil Servants on Tuesday.
The association’s secretary-general Tom Odege said the scheme was long overdue and blamed the government for the delay.
“We met and agreed on the structure,” Mr Odege said.
The delay was occasioned by differences on the programme’s implementation, with the government insisting on managing it but the union saying a board of trustees should be in charge.
“The project must have a separate account. We will appoint seven members on the board,” Mr Odege said. The secretary-general said it would benefit more than 400,000 members, including teachers.
Civil servants were to contribute two per cent of their monthly pay the scheme in the first year, five per cent in the second and 7.5 per cent from the third year onwards.
The government was match every worker’s contribution with another 15 per cent of their salary.
The State would also take out and maintain a life insurance policy valued at five times the member’s annual pensionable emoluments.
The retirement age for civil servants rose to 60 from 55 in 2009. It is estimated that 20,000 civil servants retire every year.
Kenya’s public service workers have since independence enjoyed a defined benefit scheme shouldered by taxpayers through the consolidated fund.
Mr Odege also talked about delay in submission of workers’ contribution to the National Social Security Fund, saying for four years, the national and county governments have not submitted more than Sh2 billion.