Teachers, civil servants and members of the disciplined forces are staring at looming agony in January next year, 2019, after the government made good of its plan to introduce a mandatory contributory scheme. The government employees are set to lose 7.5% of their basic salary towards the statutory pension scheme. This is the first time that the employees will be contributing for their retirement since the government has shouldered the whole responsibility. In the new contributory scheme, the servants will forfeit 7.5% of their monthly gross pay as the government gives twice as much, 15%. The cash starved government is on a collusion part to cut down on its spending in a bid to procure an additional loan facility of 1.5 billion US dollars from the International Monetary Fund, IMF.
“I know we have to do it this time round. I am really hopeful this time we will start it, hopefully in January”, said Mr. Kamau Thugge who is the Treasury Permanent secretary.
The Kenyan government has been trying to introduce the pension scheme for the past twelve years with little success. This new deduction is coming after the government introduced another monthly statutory tax of 1.5% of gross salary for government officers earning an excess of Ksh. 100,000. These funds will go towards a housing scheme that is among the big 4 agenda of the president Uhuru Kenyatta led government.
This now means that Chief principals in job group Q (T- Scale 15/ D5) will remit over Kshs. 7,000 per month to the school whose intent is to construct low cost housing units. Senior principals in Job group P/ T-scale 14/ D4 will forfeit Kshs. 6,000 monthly. Secondary school teachers in job groups G, H, J and K should prepare to lose excesses of Kshs. 1,520, Kshs. 1,777, Kshs. 1,959 and Kshs. 2,240 respectively.
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