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{
    "id": 1569817,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/1569817/?format=api",
    "text_counter": 29,
    "type": "speech",
    "speaker_name": "Hon. John Mbadi",
    "speaker_title": "The Cabinet Secretary for National Treasury and Economic Planning",
    "speaker": null,
    "content": "Number two is an actuarial valuation of the Public Service Pension Scheme. Regular Actuarial Assessments are conducted every four years to evaluate pension liabilities, funding levels and sustainability. The other one is a Comprehensive Actuarial Review which is currently underway to ensure the long-term financial stability of the pension system. (b) Legal Reforms to Strengthen the Pension Framework; the Government is implementing legal reforms to align public service Pension with our Constitution and recently formulated National Retirement Benefits Policy. These reforms seek to create a more equitable, transparent and robust pension system while ensuring fiscal sustainability. (c) The Policy Measures to Align Pension with Economic Conditions. To protect pensioners from economic shocks and inflation, the Government has implemented the following key policy measures: (1) Increased tax exemptions on pension contributions from Kshs240,000 per annum to Kshs360,000 per annum. What that simply means is that previously, before December 27th, when we passed the Tax Laws (Amendment) Bill, a pension up to Kshs20,000 per month or Kshs200,000 per annum was exempted from tax if you contributed to a pension scheme. Now that has gone up to Kshs30,000 per month. This adjustment not only helps mitigate the effects of inflation but also increases employees' disposable income, reduces payee liabilities and promotes a stronger savings culture. This is one of the provisions in the Tax Laws (Amendment) Bill which is now an Act of Parliament. That was very progressive, we encouraged Kenyans to support and fortunately, it was passed. (2) Tax Exemption on Pension Benefits. The removal of taxes on pension benefits provides retirees with a higher post-retirement income, improving their financial well- being and ensuring a more comfortable retirement. Mr. Speaker, Sir, I wish to report here for those who may not know that, from 27th December, 2024, anyone accessing his pension is now doing so without paying any tax. That is like saving 30 per cent of your entitlement. I think it has been very progressive. Those who have benefited from the same can attest to that. These tax reforms create incentives for individuals to save more for retirement, strengthening financial security in old age and reducing dependency on Government support in later years. (3) We are also strengthening post-retirement medical care. As you are aware, we are now providing tax exemption on post-retirement medical contributions. If you are contributing to a post-retirement medical scheme, you enjoy tax exemption. (4) Establishment of post-retirement medical funds. The National Treasury, through Circular No. 9 of 2024, authorised pension schemes to set up dedicated post- retirement medical funds, ensuring that these have access to affordable and sustainable health care solutions. I am sure you are aware that even Parliament is presently in the process of setting up this Fund to take care of the medical needs of retired MPs. This is to all public servants also. The electronic version of the Senate Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Director, Hansard and AudioServices, Senate."
}