The Co-operative Bank, the NCBA Group and Stanbic Bank have bagged a lucrative Sh. 31 billion pension deal from the National Treasury. Under the new deal, the three banks will keep more than Sh. 31.2 billion in annual pension contributions by more than 350,000 public servants. These include police officers and teachers. The new fund will be known as CPF Financial Services Limited and will run under the Public Service Superannuation Scheme.
The three banks are reported to have been selected based on their charges, stability, and interest on the monies they will be holding.
All civil servants who pay NSSF moved to permanent & pensionable
In early 2021, civil servants who pay National Social Security Fund have been promoted to permanent and pensionable terms. This came as the State sought to realign the payroll for these workers to ensure that employees take no less than a third of their salary. The move was also to facilitate the roll out of the contributory pension scheme by civil servants which will be done through a check-off system. Members of the pension scheme were required to be employees serving on permanent and pensionable terms and aged below 45 years as at January 2021, which prompted the State to have all civil servants on NSSF upgraded to permanent and pensionable terms.
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Civil servants including teachers and police officers contribute 7.5 per cent of their basic salary to the Public Service Superannuation Scheme. The deductions will start at 2 per cent in the first year; five per cent in the second year and 7.5 per cent in the third year. Employees will have an option to make additional contributions voluntarily above the mandatory 7.5 per cent, while the government will cater to 15 per cent.