Teachers employed by Teachers Service Commission (TSC)are still recovering from confusion after a raft of deductions was made on their July pay slips.

The Commission has activated its T-Pay portal and teachers are now accessing their payslips online.

Already a good number of teachers have received their July salaries with banks like Equity,KCB. Cooperative and Absa paying by today.

However, what is evident is that teachers are for the first time are seeing a National Social Security Fund (NSSF) deducted in their pay.

Intern teachers in primary and junior secondary schools were also not spared. Around one thousand shillings was deducted after the newly introduced deductions were made.

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Though some teachers received their salaries with the annual increment and others with arrears the deductions has shrunk the overall net pay significantly.

We asked some experts why are teachers subjected to two health insurance covers (NHIF and AON Minet) and now a NSSF deduction when they are already paying 7.5% of their basic pay for provident fund.

According to an NSSF official, it is a responsibility of every Kenyan citizen to contribute towards the NHIF cover as well as the NSSF fund.

Whether one will have an additional fund towards another social security or health cover its their own choice, he says.

The NSSF act was passed in 2013 by parliament way before the introduction of Provident fund making it mandatory for all employees to contribute Ksh.360 towards the scheme. It has since been battling a court case until 3rd February 2023 when the court ruled in its favour. The act is now a law and is being implemented by the government.

“Attention is drawn to Circular letter Ref. No.OP/CAB.1/BA dated 13th January,2021 from the Head of Public Service on implementation of the Public Service Superannuation Scheme (PSSS). In the circular under reference, clarification was made on the implementation of the PSSS and NSSF Acts,” reads a circular sent by the ministry of public service to all accounting officers.

“In addition,the Court of Appeal of Kenya dedlared that the National Social Security Fund (NSSF) Act No. 45 of 2013 is constitutional vide the ruling on 3rd February, 2023. This rulling made NSSF contributions mandatory for all employers and employees in the Public Service.

Further,Section 20 of the Act categorizes the employers and employees contributions into two tiers, namely Tier I and Tier II. All public servants are subject to Tier I mandatory contributions. This will require every employee to contribute Kenya Shillings three hundred and sixty (Ksh. 360) monthly while the employer contributes a similar amount (Kshs.360) for each employee. The Act requires all employers to deduct and remit monthly contribution to NSSF by the 9th day of every month,” continues the circular.

The purpose of this circular letter therefore, is to request you to ensure compliance with the provisions of the NSSF Act,2013 and contents of this circular with effect form 1st July,2023.

The Head of Public Service, Joseph Kinyua, has released details which will guide deductions of 5% of public officer’s basic salary towards the new pension scheme from 1st January 2022.

In the fresh orders, Kinyua says public officers should realign their salaries to comply with 3% deduction as well as the provisions of section 19 (3) of the Employment Act,2007 which requires an employee to take home not less than one third of their salary. This implies that public servants will have to obey the one third rule prior to pension deductions.

The scheme which started on 1st January 2021 saw all public officers losing 2% of the basic salary channeled towards the scheme but the amount will increase by 3% in January 2022.

Kinyua had directed implementation of the Public Service Superannuation Scheme to include all Civil Servants, Teachers and Disciplined Services.

Records on the current service pension scheme indicate there are 375,000 teachers, 12,000 police and prison staff, more than 270,000 pensioners and 75,000 dependants.

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Provident Fund-objectives, coverage, membership, features and benefits

This means that public workers will contribute approximately Sh2.4 billion monthly or Sh28 billion to the fund once it’s in full operation.

Kinyua said the rate of contribution will be graduated at the rate of 2% in the first year (2021); 5% in the second year (2022); and 7.5% in the third year (2023).

However, Kinyua said employees have the option to make additional voluntary contributions above the mandatory 7.5% of their basic salary.

The Public Service Superannuation Scheme Act 2012 was enacted as part of Government reform

initiatives in the pensions sector.

The Act established the contributory Public Service Superannuation Scheme (PSSS) in line with the policy direction issued by Government through the National Treasury Circular No.18 of 2010.

The Circular directed the conversion of all Defined Benefits Schemes in the public sector to Defined Contributory Schemes.

The objective was to align public service pension schemes with best practice in the retirement benefits industry.

The Head of Public Service says membership of the Scheme shall comprise the following categories:

i) Employees serving on permanent and pensionable terms of service and aged below 45 years as at 1st January, 2021;

ii) New employees who join the Public Service on or after 1st January, 2021 on permanent and pensionable terms of service;

iii) Employees aged 45 years and above as at 1st January, 2021 who opt to join the new contributory Scheme; and

iv) Employees whose services were transferred to a county government through letter No DCCIAON /91/XIV/125) dated 17th May 2016 are currently covered under the Public Service Pension Scheme, and fall under the first or third category above.

starting January 2021, teachers and other civil servants will begin contributing towards a new scheme, public service superannuation  scheme, PSSS.

contributions towards the current scheme, public service pension scheme ( PSPS) will stop for all civil servants who will be below 45 years as January 2021. PSPS has had a fair share of limitations, which have really frustrated teachers and other civil servants.

•  The Scheme has continuously disadvantaged employees who may wish to leave the service before they attain the age of 50 years since they do not qualify for pension or any other benefit. This has forced a larger portion of work force to remain in employment or to serve only one undesirable employer till retirement.

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Teachers’ January 2021 Basic Salary Scales After Pension Deductions

Quick Facts about the January Contributory Pension Scheme As WCPS Contribution Ends 

• Benefits under the current scheme are not portable. Being non portable, it simply means that the accrued pension benefits under the current contributory Scheme cannot be transferred by an employee from one registered scheme to another irrespective of the sector (private or public). An employee who wishes to quit this current scheme for another scheme can transfer, forcing him to either ignore, or remit to two schemes.
• The benefits in the current scheme are predefined and the scheme does not allow for improvement of the benefits. There is no investment income or voluntary contribution.
• The current scheme is expensive and unsustainable in the long run.
• The current scheme is discriminatory to male officers on account of marriage gratuity and widowers pension. Who said that men cannot be vulnerable when they lose their spouses? And must men be the first to die in a family? Over time, men have been contributing towards WCPS, a pension that women have never contributed towards. This scheme assumed a lot of events that cannot be necessarily practical in real life.
• The accrued retirement benefits in the current scheme cannot be accessed while   in service, hence not applicable for personal development.
• The scheme is Discriminatory against female officers as they are required to meet certain additional conditions to be allowed to contribute towards WCPS. May be some women teachers and civil servants were willing to contribute towards widowers and children pension scheme, WCPS, but the current scheme locked them out.