TSC: Retirement Benefits/ Pension paid to teachers; when can a teacher qualify for pension and all you need to know about the current pension and the new proposed contributory pension scheme
THE CURRENT PENSION SCHEME:
The Pensions Act (Cap.189), the main Act, makes provisions for the granting and regulating the payment of pensions, gratuities and other allowances in respect of the public service for officers under the Government of Kenya.
According to the existing terms and conditions of service, officers in the public service expect terminal benefits in accordance with their letters of appointment, as an incentive for the services they render to the country for a number of years of their working life.
Paragraph 4 of the Letter of (Probationary) Appointment in the service of the Government of Kenya, Form G.P. 24 (Revised) reads as follows:-
“If you are confirmed in your appointment, you will be eligible on retirement for retiring
benefits in accordance with the provisions of the Pensions Legislation of the Public Service
of Kenya”.
An officer who has rendered pensionable service to the Government of Kenya expects the payment of retirement benefits in accordance with the provisions of the Pensions Act. The benefits in question are non-contributory or free. In other words, the officer does not have to contribute a part of his salary in order to secure rights to retiring benefits.
In accordance with the provisions of the Pensions Act (Cap.189) Civil Servants or their dependants may be paid, on leaving the service of the Government and on fulfilling certain conditions, one or more of the following benefits:
• Service pension plus commuted pension
• Service gratuity
• Marriage gratuity
• Injury pension
• Death gratuity
• Dependants pension
• Compassionate gratuity
• Annual allowance
1. Service pension plus commuted pension
Calculation of the officer’s pension and maximum pension – Regulation 4
Having ascertained the officer’s particulars on eligibility for pension – the pension due to
him is calculated by taking one-four hundred eightieth of the final pensionable emoluments
for each completed month of pensionable service, subject to a maximum of the highest
pensionable salary drawn by the officer in the course of his service.
(Completed month x annual salary) / 480
Therefore, an officer with ten years’ pensionable service, with final salary of K£1000-0-00
cts p.a., would be eligible for a pension calculated as under.
10 years x 12 months x K£1000-0-00cts p.a./ 480
= K£250 per annum
An officer may prior to the date of retirement, elect to receive three-quarters of his annual
pension and to receive in lieu of the other one-quarter, a lump sum gratuity equal to twenty
times its amount. He would thus receive a reduced pension and a gratuity in lieu of full
pension.
If in the case quoted above, the officer elected at the time of retirement, to receive a reduced pension and to commute a quarter of his pension, his dues would be worked out as follows:-
Unreduced pension as worked out above
= K£250 per annum
or Reduced pension = ¾ x K£250 per annum
= K£187.5 per annum
together with a commuted pension gratuity
= ¼ x K£250 x 20
= K£1250 payable in lump sum
on retirement.
Death Gratuity 2 x £1200 = £2400
2. Service gratuity
Calculation of gratuity where 10 years qualifying service is not completed – Regulation
5:
An officer who retires from the service in circumstances entitling him to a pension before
completion of the necessary 10 years qualifying service is eligible for a gratuity at the rate
of 5 times the annual amount of the pension, which if there had been no qualifying period,
might have been granted to him. Thus for 8 years pensionable service the gratuity payable
to an officer whose emoluments amounted to K£1200 p.a. would be:-
8 years x 12 months x K£1200 x 5 = K£1200.00/ 480
An officer who has retired from the service with less than 10 years qualifying service on
account of injuries received on duty or an abolition or re-organization grounds, has an
option for either the gratuity as calculated in this paragraph, or a pension calculated as in
paragraph 1 above.
3. Marriage gratuity – Regulation 6:
A female officer who resigns from the service on or with a view to marriage or who is
required to retire on account of marriage and has completed at least 5 years service under
the Government, having been confirmed in a pensionable office may be granted a
marriage gratuity on production of satisfactory evidence of her marriage within six months
of her marriage or retirement at the rate of one-twelfth of a months pensionable emoluments for each completed month of pensionable service, subject to a maximum of one year’s pensionable emoluments.
Mainly TSC Female Officers
(i) Thus, an officer who has done 10 years pensionable service on a salary of K£1200
p.a. would be eligible for a marriage gratuity calculated as follows:-
K£1200 x 10 years x 12 months/ 144 = K£100
(ii) However if the officer had done 15 years pensionable service on a salary of K£1200
p.a., she would be eligible for a marriage gratuity calculated as follows:-
K£1200 x 15 years x 12 months/144 = K£1500,
But limited to one years salary i.e. K£1200
4. Injury pension
Calculation of service gratuity for Police, Prisons, A.P. and Forest Guards –
Regulation 26
This gratuity is calculated at the rate of one month’s pay for each complete year of service.
(i) Thus an officer who has done 12 years service and resigns voluntarily on completion
of 12 years service on a salary of K£531 p.a. would have his service gratuity
calculated as follows:-
K£531 x 12 years/ 12 = K£531
(ii) If he had done 16 years or 20 years service, his service gratuity would be:
K£531 x 16 years/12 = K£708
(iii) K£531 x 20 years/12 = K£885
5. Death Gratuity – Section 18
A death gratuity of an amount not exceeding TWICE the amount of a deceased
pensionable officer’s annual pensionable emoluments or his commuted pension gratuity
whichever is the greater is payable to the legal personal representative of the officer.
Where an officer who has retired from the service of the Government dies immediately
thereafter, a death gratuity equal to the difference between what has already been paid to
him by way of commuted pension gratuity and monthly pensions on the one hand; and what should have been paid as death gratuity had he died on the day of his retirement, would
become payable to his legal personal representative.
Pensionable Emoluments = £1200
Commuted Pension Gratuity = ¼ x K£250 x 20
= K£1250 payable in lump sum
on retirement.
Death Gratuity 2 x £1200 = £2400
6. Pension to Dependants on the Death of Officer in service of retirement – Section 17
When an officer who has had ten or more years’ service dies after he has retired from the
service of the Government having been granted a pension under the Pensions Act, a
dependants’ pension to the widow or the children of the officer is payable for a period of
five years at the rate of the officer’s pension at the date of his death. The dependants’
pension is also paid to the widow or children of the officer in case where a pensionable
officer who has served the Government for ten or more years dies while in the service.
Otherwise, if there are no dependants pension ceases on the date of death.
Pensionable Emoluments = £1200
Unreduced Pension = 10 x 12 x 1200/480
= £300
Dependant’s Pension = £300 but for 5 years only
Plus:
7. Dependants’ Pension or Killed on duty pension – Section 19:
A pension becomes payable to the widow and/or children of an officer who dies
Ø as a result of injuries received in the actual discharge of his duty;
Ø without his own default and
Ø on account of circumstances specifically attributable to the nature of his duty.
The widow’s pension is payable to her while she remains unmarried and of good character
at the rate of 10/60ths of the officer’s pensionable emoluments at the date of his injury or
death. The pension payable to each child is at the rate of 1/8th of their mother’s pension,
subject to a maximum of 6 children.
Pensionable Emoluments at injury = £1200
KID Dependant’s Pension = 10/60 x £1200
= £200
Children = 1/8th x £200 = £25
8. Injury Pension – Regulation 25:
An officer who is permanently injured in the same circumstances referred to in para. 7
above i.e.
Ø as a result of injuries received in the actual discharge of his duty;
Ø without his own default;
and
Ø on account of circumstances specifically attributable to the nature of his duty.
will in addition to any gratuity or pension awarded to him under regulation 4 and 5 of the
pensions Regulations also receive an additional injury pension proportionate to his
pensionable emoluments at the date of his injury at the following rates:-
Steps to take when you are injured: –
Ø Reported immediately to the Director of Pensions (except Workmen’s Compensation)
Ø Appear in person before a medical Board of 3 persons
Ø As soon as possible after the injury
Ø MD 304 Form signed by the Director of Medical Services
Ø LD 104 Form with salary details
Percentage paid
Where his capacity to contribute to his own support is –
Ø Slightly impaired ………………………….. 5/60ths
Ø Impaired ………………………………….. 10/60ths
Ø Materially impaired ……………………… 15/60ths
Ø Totally destroyed ………………………… 20/60ths
e.g. Pensionable Emoluments at Injury date = £1000
Pension under Reg.4 = £300
Injury Pension 5/60 x £1000 = £ 83.33
Total Pension = £383.33
NB: Non-pensionable officers earning more than £4000 p.a. are paid under Workmen’s
Compensation immediately on confirmation of Injury
9. Pension on Abolition of office or Re-organization of Ministry or Department: Regulation 24
An officer who is retired because of abolition of his office or reorganization of his Ministry
or Department is eligible for a pension or gratuity at his option, even though he may not
have completed the necessary ten years qualifying service.
He is also eligible for an additional pension at the rate of one-sixtieth of his pensionable
emoluments for each completed period of three years’ pensionable service, the additional
pension being limited to ten-sixtieths of his pensionable emoluments, and together with the
remainder of his pension to the pension for which he would have been eligible if he had
continued until the age of 55 years to hold the office held by him at the date of his retirement having received all increments for which he would have been eligible at that
date.
Calculation
Pensionable Emoluments = £1200
Pension under Reg. 4
10 years x 12 months x K£1200-0-00cts p.a./480
= K£300 per annum
Additional Pension = 1/60 x 3* x 1200
= £60
* 10 years = 3 periods of 3 years completed
Total Pension = £1260
10. Compassionate Gratuity – Regulation 28
An officer who is not eligible for a pension, either because he is a holder of a non pensionable office, or a holder of a pensionable office in which he has not been confirmed,
and who being a male officer was appointed or transferred to the service of the Government before 1st April 1966, and being a female officer was so appointed or transferred before 1st January 1977, is eligible for the grant of a compassionate gratuity at the rate of one-twelfth of a month’s pay as at the date of retirement for each completed month of service.
NB: NSSF came into effect 1966 and non-pensionable officers since then are covered
under NSSF. Hence this award is being phased out. IN addition, these officers are
expected to be covered under the new scheme.
To qualify for a compassionate gratuity an officer should have
• served for not less than 10 years if he retires on age grounds, and for
• not less than 7 years if he retires on the grounds of ill-health;
• public interest;
• abolition of office or re-organization.
Illustration: Thus an officer who has served for 25 years and leaves the service on age
grounds at a monthly pay of Kshs.885/= would have his compassionate gratuity calculated
as follows:-
1/12 of Kshs.885 x 25 years x 12 months
= Kshs.22,125/=
11. Annual Allowance: Regulation 28(3)
In addition to the compassionate gratuity already granted to him, an officer who has been
in the public service for not less than 30 years and whose salary on retirement is not more
than the maximum salary payable for the time being to officers serving job Group “B” may
be granted an annual allowance of Kshs.1200/= or KShs100/= per month.
12. Maintenance Allowance – Section 14 (Bankruptcy) and 15 (Conviction-18 months)
This is an allowance payable to the family (wife and/or children) of a pensioner following
the cessation of his pension on bankruptcy or imprisonment by a competent court for any
offence. It is normally equivalent to the pension that was being earned by the pensioner
at the time the pension ceased, but it may be less at the discretion of the President (i.e.
Director of Pensions).
Presidential pardon required in order for the pension to be reinstated once out of prison or
the bankruptcy ruling is lifted. Given personally by the President.
PENSIONS SCHEMES FOR MEMBERS OF THE TEACHERS SERVICE
As you are probably aware, a Free Pensions Scheme was introduced for the members of the African Teachers Service with effect from 1st August, 1962 vide Education Circular No.3 of 1962 dated 18th October, 1962. All teachers, who were then contributing to the African Teachers Service Contributory Pensions Fund (ATS) were provided with four options as under:-
OPTION (A)
Teachers were to elect to come on to a Free Government Pension Scheme back-dated for
the period of their previous contribution, in which case they would forfeit their rights under
the contributory scheme.
OPTION (B)
They were to choose to retain their rights under the present scheme in respect of past
contributions and to transfer to the new scheme for a date agreed, in which case the Free
Pension will not be back-dated.
OPTION (C)
They were to continue under the present scheme, which would mean continuing to
contribute 1/2% of the teacher’s salary and the employer continuing to contribute 1/2%.
OPTION (D)
They were to elect to come on to a free pension scheme and to withdraw the teachers’
contribution plus interest to the present scheme, at a time and on a basis to be agreed
between the Government and the Union.
All contributors to the African Teachers Service contributory Pensions Fund were given
copies of the Education Circular No.3 of 1962 dated 18th October, 1962 and were required
to elect only one of the four options given.
Following the issue of the Circular it was agreed as follows:-
(i) Teachers who were contributors to the Provident Funds prior to 1st January, 1956
when the African Teachers Service Contributory Pensions Fund was established,
and whose past contributions were handed over to the Pensions Fund and who
continued to contribute to the new Fund from that date, would be eligible for a
refund of their own contributions and their employers’ contributions plus interest on
both.
(ii) Those who did not qualify for the refund of their employers’ contributions – this
group comprised teachers who joined the Pensions Fund from 1st January, 1956 and
thereafter the first time and those who returned to teaching after a break in service –
would receive the benefit on one-third (1/3) service for pensions computation
under the Pensions Regulations (Cap.189). The one-third service applied only to the
contributory service, between 1st January, 1956 and 31st July, 1962.
A vast majority of the contributors opted to withdraw their contributions under Option (D).
Following the receipt of the option forms it was decided that the refunds would be made in
two instalments. Refunds were of two categories. One consisted of Teacher’s contributions
and Employer’s contributions plus interest on both and the other, Teacher’s contributions
plus interest only.
EFFECT OF OPTIONS CHOSEN
Those who withdrew their own and their employers’ contributions plus interest, their
contributory service and any other previous service would not count as pensionable
service. Only service from 1st August, 1962 to the date of retirement would count as
pensionable service. This would mean that by receiving the employers’ contributions in
addition to their own, they lost their previous service for a pension under the Pensions
Regulations (Cap.189).
Those who withdrew their own contributions but not their employers’ the period of their
contributory service would count as to one-third 1/3 as pensionable service and service
from 1st August, 1962 to the date of retirement would count in full as pensionable service.
Any service prior to the contributory service would not count as pensionable service under
the Pensions Regulations (Cap.189).
As regards options (A), (B) and (C) the position was different.
OPTION (A)
Teachers were not eligible for a refund of the contributions. They just surrendered their
contributions including those of the employers to the Government so that in the event of
their retirement from the Teachers Service they would enjoy a pension based on the
following pensionable service.
(i) Non-contributory service i.e. service before the contributory service would count in
half as pensionable service.
(ii) Contributory service would count in full as pensionable sfrvice.
(iii) Service from 1st August, 1962 to the date of retirement would count in full as
pensionable service.
OPTION (B)
Teachers were not eligible for a refund of the contributions unless they left the service
before being pensionable. They just retained their rights under the African Teachers
Service Contributory Pensions Scheme as at 31st July, 1962 and transferred to the Free
Pensions Scheme from 1st August, 1962 so that in the event of their retirement from the
service they could enjoy two pensions:-
(i) One calculated in relation to the contributory service as at 31st July, 1962 under the
Pensions fund Regulations (Cap.212).
(ii) The other calculated in relation to the service from 1st August, 1962 to the date of
retirement under the Pensions Regulations (Cap.189).
Calculations of the two pensions were not similar and the total pension would be less than
the pension one could earn under Option (A).
OPTION (C)
Teachers were not eligible for a refund of the contributions unless they left the service
before being pensionable. They opted to continue to contribute to the African Teachers
Service contributory Pensions Fund and thus were liable to the continued payment of 1/2% of the teacher’s salary until the date of retirement, the employer continued to pay 1/2% until the date of retirement.
Unlike options (A), (B) and (D) where the teachers could opt to retire on pension after
attaining the age of 50 years, teachers with Option (C) could only retire on pension after
completion of 30 years of qualifying service or attaining the age of 55 years. The pension is
calculated on a different basis and is related to the contributory service. The pension rights
are governed by Pensions Fund Regulations (Cap.212). The Pension under Option (C)
would be less than it would be under either Option (A) or Option (B). In short, option (A)
was the best of all in so far as the retirement pension was concerned.
GENERAL CONSIDERATION AND CONDITIONS
Forfeiture of Pension Rights on Resignation or Dismissal
An officer who resigns except with a view to marriage in the case of a woman officer, or on
attaining the retiring age, forfeits all claims to the retiring benefits. Similarly an officer who
is dismissed from service forfeits all claims to pension, etc.
Pension is not a Right
No officer shall have an absolute right to compensation for past services or to pension,
gratuity or other allowance.
Reduction or Withdrawal of Pension
Where it is established that an officer has been guilty of negligence, irregularity or
misconduct, the pension, gratuity or other allowance, may be reduced or altogether
withheld. However, the approval of the Public Service Commission must be sought. This is
under the Constitution of Kenya.
Pension to Cease on Conviction
Where any person to whom a pension or other allowance has been granted under the
Pensions Act is sentenced to a term of imprisonment by any competent court for any
offence, such pension or allowance may be stopped. Any part of that pension or other
allowance may be paid to or applied for the maintenance or benefit of, his dependants in the manner laid down in section 13 of the Pensions Act.
Pension to Cease on Bankruptcy
Where any person to whom a pension or other allowance has been granted under this Act is adjudicated bankrupt or is declared insolvent by judgement of any competent court, then
such pension or allowance may be paid to, or applied for the maintenance or benefit of, his
dependants in the manner laid down in section 13 of the pensions Act.
Transfer of Service
This is possible only where the organization to which an officer wants to transfer his
services from the Government has been declared for the purposes of Kenya Pensions Act to
be “Public Service”. Ann officer transferring to “Other Public Service” enjoys the privilege
of having his pension rights with the Government “preserved” or “kept in cold storage” for
the duration of his service with that “Other Public Service”. In the event of his retirement
from that other service in circumstances permitted by that service, the officer will have his
benefits in respect of his service with the Government calculated separately and paid to him.
Service on Contract Terms:- Paid under the C.O.R.
Counts in full if the officer serving on those terms was being paid on a salary scale
applicable to members of the permanent establishment and if he surrendered the gratuity
earned under the contract, having been admitted without a break of service to the
pensionable establishment.
Service on Provident Fund Terms:- CAP 191
In respect of an officer who was in the service prior to 1st January, 1954 counts in full in
calculating a pension or gratuity provided that he was admitted, without a break in his
service, to the pensionable establishment, and he surrendered his own contribution to the
provident fund for the period in question.
Determination of Age – Regulation 23:
Since the earliest age acceptable for pensionable service is 18 years, and the minimum age
at which a person can be allowed to retire on age grounds is 50 years, there should be a
system of determining the age of an officer on first appointment. The age recorded in the
Application of Employment forms PSC 2 and verified at the time of the officer’s
appointment is taken as the correct age. Any alteration to this age must be, supported by the production of a birth certificate. Application for a certificate must however be routed
through the head of department who must vouch for the correctness of the age given in the record of service.
The Proposed Contributory Pension Scheme:
The government proposes a public servants superannuation scheme.
- This is a defined pension benefit scheme where both the employer and the employee contribute certain proportions towards pension benefits.
- It is mandatory for those joining service and those below 45 years.
- Those above 45 years can opt to join.
Benefits of the proposed contributory Pension scheme
An employee can transfer pension benefit credits from a former employer to another with a similar Pension scheme.
- The scheme allows employees to access part of their benefits even before the mandatory retirement age.
- Teachers joining the scheme from non-contributory pension scheme will have their past benefits transferred to the new scheme.
- Widows and Children’s Pension Scheme (WCPS) and NSSF contribution will cease immediately an employee joins the scheme.
- Those who remain in the free Pension Act will be bound by the provision of the Pensions Act cap 189.
Click on the links below to download pension cases forwarded to the treasury by the TSC for processing of pension benefits:
- Cases Forwarded to Treasury on 20th September 2018
- Cases Forwarded to Treasury on 27th September 2018
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