TSC Pays Teachers’ Salary (July) with Slight Changes; Check the Pay Rise and Deductions 2023/2024
Has TSC paid Teachers Salaries in July?
The key question this July within the realm of education is whether the Teachers Service Commission (TSC) has paid teachers’ salaries.
According to the latest TSC news hitting our news desk, TSC has indeed paid July salaries for both teachers and the secretariat.
Yesterday, social media pages were dotted with white smoke, a coded message that can only get decoded by teachers showing that salaries had hit their accounts.
Unfortunately, there have been complaints on several KUPPET pages bordering on unwarranted deductions. Some teachers have accused their employer of deducting up to Shs 360 for NSSF yet it is in the public knowledge that all government workers were recently incorporated into a new pension scheme dubbed PSSS.
Now teachers are waiting with bated breath for their July 2023 payslips to confirm whether there were illegal deductions made on their July salaries. Below are some key facts about the newly introduced PSSS pension scheme.
KENYA’S NEW 7.5 PC PENSION SCHEME: FACTS ABOUT THE NEW CONTRIBUTORY PENSION SCHEME FOR TEACHERS, CIVIL SERVANTS IN KENYA; FULL DETAILS ON THE NEW PENSION SCHEME THAT WILL SEE TEACHERS TAKE A 7.5% PAY CUT AS FROM JANUARY 2021
Teachers, police, and other civil servants in Kenya are preparing for a 7.5% pay cut towards the newly established Public Service Superannuation Pension Scheme, PSSS set to be rolled out in January 2021 as announced by CS Ukur Yattani in August 2020.
WHAT IS A PENSION SCHEME?
A pension scheme is a well-planned retirement plan for a particular group of workers. Kenya’s new pension plan targets all employees in the formal sector who will be expected to contribute 7.5% of their monthly salaries.
Kenya’s new pension scheme is mandatory for all public service Commission, PSC employees, Teachers Service Commission (TSC) employees, the National Police Service Commission, NPCS employees, and any other employees that the cabinet secretary deems fit for the mandatory pension contributory scheme.
THE HISTORY OF THE NEW PUBLIC SERVICE SUPERANNUATION PENSION SCHEME, PSSS
Many public servants especially new employees do not however understand why or when the new pension scheme was hatched. They were taken aback after CS Yattani announced its rollout in January 2021.
The new pension scheme for civil servants in Kenya dates back to the year 2003. It was given a nod by the cabinet following concerns about the growing wage bill and its unsustainability.
In the year 2004, an actuarial study conducted revealed that the pension liability in Kenya had hit Ksh 271.2 billion, translating to 25% of the Gross Domestic Product, GDP at that time.
For the first time in 2007, the Kenyan government tried to introduce the new Public Service Superannuation Scheme, PSSS. The new scheme however faced a lot of resistance from various quarters.
A later study conducted in 2013 established a ballooned wage bill almost hitting the 1 trillion mark. To manage the ballooned wage bill, the government had to implement the new PSSS pension scheme.
It is now imminent however that the new pension scheme will be implemented after 13 years and it will be mandatory for civil servants aged 45 and below and for the newly employed ones.
HOW MUCH WILL TSC EMPLOYED TEACHERS IN KENYA CONTRIBUTE TO THE NEW PUBLIC SERVICE SUPERANNUATION SCHEME?
All employees aged 45 years and below will be required to pay 7.5% of their monthly salaries.
WHICH CATEGORY OF EMPLOYEES DOES THE NEW PENSION SCHEME TARGET?
The new scheme targets more than 500, 000 civil servants
HOW DOES THE NEW PENSION SCHEME, PSSS WORK?
Over 530,000 civil servants, police and teachers included, will in January have their take-home pay cut by 7.5 percent for they will start contributing towards their pension savings scheme.
The employees, attached to various ministries and State agencies will hence see a portion of their salaries sliced for onward remittance to the Public Service Superannuation Scheme (PSSS), soon to be created.
Membership to the scheme will be mandatory to all new entrants upon commencement of the Act and all employees aged below 45 as at the date,” said a Treasury brief on the fund.
“Employees aged 45 years and above will have an option to join the scheme by completing the Public Service Superannuation Scheme option form.”
Civil servants were initially to contribute two percent of their monthly salary to the scheme in the first year, five percent in the second, and 7.5 percent from the third year.
But the staggering has now been stopped, with workers expected to contribute the 7.5 percent of their pay in the first year, starting January.
The government will match the contributions with an amount equivalent to 15 percent of every workers’ monthly pay.
This will be equivalent to about Sh6.9 billion monthly contribution or Sh55.87 billion annually, turning pension expenditures to one of the largest budget items.
ADVANTAGES OF THE NEW PENSION SCHEME (A DETAILED COMPARISON BETWEEN PSSS AND NSSF)
- Employees can transfer pension benefit credits from a former employee to another with a similar pension plan.
- Employees can access part of their benefits even before the mandatory retirement age, 60 years.
- The past benefits can be transferred to the new scheme.
- Teachers will no longer contribute towards the Widows and Children’s Pension, WCPS, and NSSF once they join the new pension scheme.
- Employees who remain in the Free Pension Act will be bound by the provision of the Pensions’ Act Cap 189.