Bima House

1. What is a Pension?

A pension is a retirement plan that guarantees a retiree a set amount of money every month, for life. This applies to officer who have served in pensionable office and has completed the qualifying service and retires from service on grounds that qualify him for pension. The benefit formula is tied to years of service and a retirees’ last basic salary.

2.What is the qualifying service and age for one to be eligible for pension upon retirement?

The qualifying service for pension is 10 years while the qualifying age for pension is 50 years.

3.What is the mandatory retirement age?

The mandatory retirement age in the Public Service is 60 years. However, for people living with disabilities and who are registered members of the National Council for People Living with Disabilities (NCPLWD), there mandatory retirement age is 65 years.

4.What proportion of ones’ pension can he commute?

A pensioner is allowed to commute one quarter of the unreduced pension and hence receive first, the commuted lump sum and a reduced pension per month for the rest of their life.

5.Who is eligible for service gratuity?

On the other hand, Service Gratuity is payable to officers who retire from service before completion of ten years qualifying service. Subordinate officers who are members of the police force, prisons, Administration Police and Forest Guards who retire from service on completion of 12 to 20 years of service are paid service gratuity.

6.How is death gratuity computed?

Death Gratuity is paid to the legal personal representative of a deceased officer. It is assessed as normal pension but what is payable is the commuted pension gratuity or two years basic salary, whichever is greater. In the case of Parliamentarians, death gratuity is computed based on five times their annual basic salary.

7.What are the dependants benefits?

In addition, if the deceased officer had more than ten years of service, his/her dependants are paid pension at the rate of the Officer’s pension at the date of death for a period of five years. If a male officer died while on duty or after retirement and was a contributor to the Widows and Children Pension Scheme (WCPS), his dependants get a further payment for the widows and children within the age of eligibility. This pension is paid to the widow for the rest of her life as long as she does not remarry. However the childrens’ portion is payable up to the time the last child attains the age 24 years upon which it ceases.

8.What are the grounds for entitlement to retirement benefits?

• On attaining age of 50 years
• On attaining mandatory retirement age of 60 years
• On medical grounds
• Termination of service in Public Interest
• Re-Organization and Abolition of Office
• Death in service
• Female officers on resignation upon marriage
• Subordinate officers in the Police, Prison warders, Forest Guards on completion of 12 years to 20 years in service.

9.What benefits are Civil Servants or their dependants entitled to under the Pensions Act Cap 189?

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.

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.

• Commuted pension gratuity (lump sum) plus monthly pension
• Service gratuity
• Marriage gratuity
• Compassionate gratuity
• Death gratuity
• Annual allowance
• Injury pension
• Dependants’ Pension
• Widows and Children’s Pension
• Killed on Duty Pension

10.What are the documents required for processing pension claims?

• GP 178
• GP 179
• GP 213
• GP 19
• Pension Commutation forms.
• Bank Account Form with copy of Bank/ATM card
• Authority Letter for retirement
• Letter of probationary appointment
• Letter of first appointment
• Letter of confirmation in appointment.
• Letters of promotion
• Letters of re-designation
• Payslip/voucher for the last salary paid
• Deletion sheet from IPPD
• Confirmation of Government Liability upon retirement
• Copy of ID Card/Death certificate
• Nominee Form

11.Which legislation regulates administration of public pension?

• The Constitution
• Presidential Retirements Benefits Act 2003
• Retirement Benefits (Deputy President & Designated State Officers) Act, 2015
• Parliamentary Pensions Act Cap 196
• Pensions Act Cap. 189
• Widows and Children’s Pensions Scheme Act Cap 195
• Pension Increase Act Cap 190.
• Defense Forces Act Cap. 199
• Defense Forces Pension Regulation (gratuities and pension) for Officers and Servicemen
• Succession Law Cap 160.
• Provident Funds Act Cap 191
• Other Acts include: Cap 192, 193 and 194 which deal with European and Indian dependants pension but which are being phased out.

12.What are the formulae used to calculate the different retirement benefits?

• Pensions Act Cap 189 – 1/480
• Defense Forces Pension Regulations – 1/400
• Parliamentary Pensions Act Cap 196 – 1/300
• Presidential Retirement Benefits Act 2003 – One year salary for each term served and 80% of the salary of the incumbent President as monthly pension
• Retirement Benefits (Deputy President & Designated State Officers) Act – One year Salary for each term served and 80 percent of their last basic salary in office as monthly pension

13.What is the minimum pension?

The minimum pension w.e.f 1/7/2005 is Kshs.2,000.00

14.At what rate and frequency is pension increased?

The currently pension increase policy introduced biennial pension increase w.e.f 1/7/2005 capped at the rate of 3%. This increase is provided for in the Pensions Increase Act, Cap 190.

15.Are the Pensions Schemes administered by the National Treasury defined benefit or defined contribution schemes?

The pension schemes administered by the Pensions Department under the National Treasury are defined benefit schemes.

However, the Public Service Superannuation Scheme for Civil Servants, Teachers and the Disciplined Services (Police & Prisons Officers) established under the Public Service Superannuation Scheme (PSSS) Act, 2012 commenced on 1^st January, 2021. These new contributory scheme is under the management of a Board of Trustees. Membership to the PSSS was mandatory for all employees serving on permanent and pensionable terms who were below the age of 45 as at 1^st January, 2021. Those who were above 45 years were given an option to join the scheme by 31/03/2021.

16.Are pension benefits subjected to taxation?

Yes. Pension lump sum is taxed for amounts above 600,000 while death gratuity is taxed for amounts above Kshs.1.4 million. Taxation on monthly pensions apply on amounts above Kshs.25,000.00

17.Can pension benefits be subjected to deductions/reduction?

Pension for public servants covered under schemes administered by the Pensions Department can be subjected to deductions only to recover government liability or maintenance amounts ordered by a Court of Law to cater for children of a pensioner.

18.Who is eligible for dependants pension?

Dependants pension is only payable to the widow/s of a deceased pensioner and children of the deceased. In the case of a polygamous family, dependants pension is apportioned equally among the number of widows/families of the deceased. Dependants pension is payable for a maximum of five (5) years effective from the date of death of a deceased pensioner.

19.Who are the eligible beneficiaries under the Widows’ and Children’s Pension Scheme (WCPS)

The widow/s and children of a deceased pensioner who was a member of the WCPS are the only eligible beneficiaries for this benefit. The WCP is payable to the widow/s for the rest of their lives while the children’s share is payable until the last born attains the age of 24 while undergoing continuous education in school or college.

20.Under what circumstances can a member of the WCPS claim for refund of his contributions?

• A member can claim for refund of his contribution with interest upon resignation or dismissal from the service.
• A member who during his employment remained a bachelor and did not sire children until his retirement is eligible for refund of his contribution plus interest
• A member who was married but was either divorced or widowed prior to retirement and had children who at the time of retirement were above the age of eligibility for children’s pension is eligible for refund of his contribution plus interest.
• All male civil servants, teachers and police and prisons officers who were aged below 45 years as at 1/1/2021 and were contributors to WCPS immediately ceased contributing to the scheme after joining the Public Service Superannuation Scheme (PSSS) and will be refunded their contributions with interest upon retirement. WCPS contributions for officers who were over 45 years as at 1/1/2021 and opted to join the PSSS also get the same treatment as above.