THE PUBLIC SERVICE SUPERANNUATION SCHEME (AMENDMENT) BILL, 2025
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New Public Service Superannuation Scheme Fund Established
The Bill inserts Section 8B to establish the Public Service Superannuation Scheme Fund. The Fund will vest in and be managed by the Board, receiving all member contributions and paying out all retirement benefits.
Strict 10-Day Remittance Deadline and Penalties
Under the new Section 8A, employers must deduct and remit member contributions to the Custodian within ten working days of the end of the month. If an employer fails to deduct contributions, the unremitted sums are recovered in the subsequent month alongside a penalty equal to the rate of return of the Scheme for the previous financial year.
Restructured Board of Trustees and Qualifications
The Bill replaces Section 10 to establish a restructured Board of Trustees. The Chairperson, appointed by the President, must hold a bachelor's degree in a relevant field (such as pension administration, actuarial science, finance, or law) and have at least twenty years of experience, including ten years in senior management.
Exemption from NSSF Tier II and Unclaimed Financial Assets
The Bill exempts Scheme beneficiaries from Tier II contributions under the National Social Security Fund Act (Cap. 258). Additionally, the Unclaimed Financial Assets Act (Cap. 494) is amended under Section 56B so its provisions do not apply to the Scheme.
Immediate Vesting and Transfer of Retirement Savings
A new Section 25 guarantees that all retirement savings immediately vest in a member. Under Section 33A, members exiting public service are permitted to transfer their accumulated retirement savings account to another registered pension scheme.
Bill No.
National Assembly Bills No. 33
Gazette No.
Supplement No. 116
Sponsor
Kimani Ichung'wah
Background
The Public Service Superannuation Scheme (Amendment) Bill, 2025 seeks to amend the Public Service Superannuation Scheme Act (Cap. 189A) to improve governance, safeguard members' retirement savings, and align the Scheme with the Retirement Benefits Act.
Key Amendments
- Cap. 189A (Public Service Superannuation Scheme Act): Formally establishes a dedicated Fund (Section 8B), restructures the Board of Trustees (Section 10), allows immediate vesting of retirement savings (Section 25), and enables members to transfer savings to other registered schemes (Section 33A). It also limits administrative expenses of the Scheme to one percent of total Scheme assets (Section 39).
- Cap. 446 (State Corporations Act): Amends Section 2 to exclude the Scheme from the definition of a 'State Corporation'.
- Cap. 258 (National Social Security Fund Act): Exempts beneficiaries of the Scheme from NSSF Tier II contributions.
- Cap. 494 (Unclaimed Financial Assets Act): Specifies that the provisions of Cap. 494 do not apply to the Scheme.
New Obligations
- Employers: Section 8A requires employers to deduct and remit members' contributions to the Custodian within ten working days after the end of the month in which they fall due.
- Board of Trustees: Section 38A requires the Board to convene an annual general meeting of members within six months of the end of the financial year. Section 44 requires annual accounts to be prepared and submitted for auditing by the Auditor-General.
- Government: Section 50 requires the Government to determine, revalue (at 5% per annum), and issue a letter of recognition of accrued benefits for members who joined prior to January 1, 2021, within six months of the Act's commencement.
Penalties
- Employer Default: Under Section 6, if an employer fails to deduct and remit contributions, they face a penalty on the unpaid amount at the rate of the return of the Scheme for the previous financial year.
- Board Removal: Any trustee or employee convicted of an offence under the Act shall immediately cease to be a member of the Board (Section 49).
Transitional Provisions
- Board Transition: Section 56C provides that existing members of the Board serving immediately before the commencement of the Amendment Act shall continue to serve until the end of their respective terms.
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