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{
    "id": 147696,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/147696/?format=api",
    "text_counter": 24,
    "type": "speech",
    "speaker_name": "Mr. Otieno",
    "speaker_title": "The Minister of State for Public Service",
    "speaker": null,
    "content": "(a) The Government’s decision was informed by the following facts:- (i) The Government is implementing a Performance-Based Management System which focuses on service delivery by the entire Public Service. That reform programme covers recruitment, training, deployment, promotion and motivation and retirement of all staff in the Public Service. The overall objective is to develop a more effective and sufficient Public Service (ii) The retirement age was raised to 60 years as part of the package to reform the Government Pension Scheme from a benefits defined pay-as-we-go scheme, to a contribution defined and funded scheme, which is the modern method of financing pensions. (iii) A contribution defined (DC) scheme is actuarially very expensive at age 55, when life expectancy after retirement would still be over 20 years. You do not need to be an actuary to figure out that 30 years of service, for example, from age 25 years to 55years, is not likely to be sufficient to deserve a pension for over 20 years, which would be from age 55 to 75. (iv) The decision was also informed by the fact that the pay-as-we-go scheme is inter-generationally inequitable. It taxes the present generation to pay for the pension of the past generation. This means that every pay increase to the current generation leads to increased tax burden to the future generation. (v) The modern pension funding method is to make the current generation fund their pension from their current productivity and output. The method allows for periodic pay reviews commensurate with service delivery and competitiveness in the job market. Pension will now vest from five years of service and employees would not now have to work to age 50 to be entitled to their pension benefits. (vi) The Government also wanted to remove the discrimination that has been there between junior staff at Job groups “A” to “F” and the senior staff at Job Groups “G” and above. Women were engaged on contracts and paid gratuity of 31 per cent periodically. Only men contributed to the Widows and Children Pension Scheme. (vii) The decision was informed by the fact that the reformed Public Service Superannuation Scheme will treat all employees equally with staff contributions of 7.5 per cent and employer contributions of 15 per cent all the way to age 60. (viii) Members are aware that, currently, the technical and academic staff of universities and research institutes retires at the age of 65 years and judges retire at 74 years, but teachers were being retired at 55 years. All the East African Community countries adjusted the retirement age to 60 years about ten years ago. (b) The reform measures being implemented by the Government will open up Public Service employment at all ages on merit and allow exit at any age on opportunity"
}