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{
    "id": 19490,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/19490/?format=api",
    "text_counter": 186,
    "type": "speech",
    "speaker_name": "Maj. Sugow",
    "speaker_title": "The Assistant Minister, Ministry of State for Public Service",
    "speaker": {
        "id": 142,
        "legal_name": "Aden Ahmed Sugow",
        "slug": "aden-sugow"
    },
    "content": " Mr. Deputy Speaker, I thank you very much for the correction. I beg to move that the Public Service Superannuation Bill (Bill No.24 of 2011) be read a second time. There are current provisions for payment of pensions benefits to teachers under the Teachers Service Commission, civil servants and the disciplined forces are under the Pensions Act, the Widows and Children’s Pension Act and the National Social Security Fund Act. These Acts provide for pensions, gratuities and or withdrawal benefits under various conditions stipulated in the respective Acts. Mr. Deputy Speaker, Sir, over the years, the Government has been concerned about the need to provide for reasonable pension benefits to its employees on retirement from the Public Service, so as to ensure reasonable quality of life on retirement. To this end, the Government has made various efforts, including regular increase in basic salaries, on which pension is calculated; increases in actual pensions, et cetera. The introduction of a contributory pension scheme for teachers, civil servants and disciplined services is a major step towards improvement of employee benefits by the Government. The scheme is compulsory to all employees below the age of 45 years as at 1st July, 2012, when the scheme is scheduled for introduction. It is optional for those over the age of 45 years as at the same date. Over the years, the cost of maintaining the pension benefits for public servants has been rising rapidly, raising concerns about its affordability and sustainability. To illustrate this concern, I will highlight the trend of expenditure in pension costs from the year 1993 to 2009/2010 financial year. In the 1993/94 financial year, the cost was Kshs1.5 billion; 1996/97 financial year, Kshs4.23 billion; 2008/2009 financial year, Kshs26.1 billion; and 2009/2010 financial year, Kshs30 billion. Mr. Deputy Speaker, Sir, this cost is projected to rise to Kshs100 billion by the year 2030. The Pension Bill takes approximately 7 per cent of Government revenue and about 1.4 per cent of GDP and is paid fully by the Government. From the above analysis, the Pension Bill places a substantially heavy burden on the Exchequer and is likely to be unsustainable in view of the country’s current and projected economic growth."
}