Govt wants public service pension Bill fast-tracked

The Government has urged Parliament to quickly enact the Public Service Pension Fund Bill 2020 into law.

Muruli Mukasa, the public service minister, said this while meeting the committee on Public Service and Local Governments and the chairpersons of the finance, legal and budget committees of Parliament.

The Bill seeks to establish the Public Service Pension Fund and the Public Service Pension Scheme, a contributory pension scheme for all public servants.

The new pension scheme is expected next financial year. Under the proposed contributory pension scheme, workers are expected to contribute 5% every month, from their salary, while the Government is to contribute 10% of one's salary towards the pension.

Under the current system, the government computes pension for each public servant considering the length of service. The public service ministry says the budget for pensioners across all levels stands at over sh500b annually. If not reviewed, the ministry projects that the budget demand for pension alone will increase to sh1trillion in the next five years.

Muruli Mukasa said the new scheme will introduce a shared responsibility between the Government and public servants to remit funds.

He said the current scheme, which is non-contributory, relies largely on budget allocations. "If there are shortfalls in revenue collection, it will have an impact on pension, just like the rest of the sectors.

This explains why the government wants the new contributory scheme fast-tracked and rolled out as soon as possible," Mukasa said.

The current scheme was established in 1939, covering just white colonialists and Indians. In 1946, it was expanded by the colonial administration to cover the retirement and social security needs of key employees in the public service.

Catherine Bitarakwate, the ministry's permanent secretary, explained that the current scheme is unfair to the general public. In addition, she said, the current scheme experiences delays due to a combination of challenges, such as budget limitations and poor management.

"We have had a battle with ghost and doubted beneficiaries with the current pension scheme. "But once we introduce a new one, it will eliminate all these at once," she said.

HOW THE NEW SCHEME WILL WORK

There are about 315,000 active government employees on the payroll. According to projections by public service, about 280,000 of them will be included in the new scheme. The contributory pension scheme will be integrated with the Integrated Personnel and Payroll System (IPPS) and the National Identification and Registration Authority.

The IPPS is a human resource management system currently used by all ministries, departments and agencies of government, to pay salaries.

As soon as a person joins public service, the IPPS and NIRA will integrate and have the same data regarding a particular person.

In addition, the person will instantly be included on the contributory pension scheme platform and individual accounts which correlate with the IPPS will be obtained. Through this, a special code will be generated, which directly communicate with supplier numbers used to pay all public servants.

The unique code will not be given to anyone, even if a public servant opts out of public service or dies.

Victor Leku-Bua, the ministry's commissioner for human resource management in charge of compensation, said such protocols will eliminate chances of creating several codes in one name, to defraud the country.