Public Service Superannuation Scheme Act

Section 1. Short title and commencement Section This Act may be cited as the Public Service Superannuation Scheme Act.

Section 2. Interpretation Section be closed at the death of the member; and

Section 3. Establishment of the Public Service Superannuation Scheme Section 3(1) There is established a scheme to be known as the Public Service Superannuation Scheme. Section 3(2) The Scheme shall be a retirement benefits scheme within the meaning of the Retirement Benefits Act (Cap. 197).

Section 4. Object and purpose of the Scheme Section pay retirement benefits to members of the Scheme;

Section 5. Membership of the Scheme Section 5(1)(a) has not attained the age of forty-five years; Section 5(1)(a)(i) has not attained the age of forty-five years; Section 5(1)(a)(ii) if the person has attained the age of forty-five years opts, within three months of such commencement or such longer period as the Cabinet Secretary may, by notice in the Gazette , prescribe, that this Act shall apply to him; or Section 5(1)(b) joins the public service on or after the commencement of this Act on a permanent and pensionable establishment, shall be a member of the Scheme. Section 5(2) For the avoidance of doubt, the law to be applied with respect to the retirement benefits of a person in the public service at the commencement of this Act who does not, where required, opt for the application of this Act under subsection (1)(a), shall be the law in force when that period of service commenced. Section 5(3) A member, other than a member who has retired and has opted to be paid his benefits under section 28(2)(a), who for any reason leaves the public service shall cease to be a member of the Scheme.

Section 6. Mandatory contribution to the Scheme Section 6(1) Every member of the Scheme shall contribute to the Scheme at the rate of seven and a half percent which shall be deducted from his monthly pensionable emoluments: Provided that where the Government fails to deduct a member’s contribution, the sum may be recovered in the subsequent months and any penalties payable thereon shall be paid by the Government. Section 6(2) The Government shall make a contribution for each member of the Scheme at the rate of at least fifteen percent of the member’s monthly pensionable emoluments: Provided that where the Government fails to make a contribution in any month, a penalty at the rate of the return of the Fund for the previous financial year shall apply on the unpaid amount. Section 6(3) The Government’s contribution under subsection (2) shall be a direct charge on the Consolidated Fund. Section 6(4) In addition to the contributions specified in subsections (1) and (2), the Government shall take out and maintain a life insurance policy that has disability benefits in favour of every member of the Scheme, for a minimum of five times of the member’s annual pensionable emoluments. Section...

Section 7. Additional voluntary contributions Section 7(1) Subject to such guidelines as the Board may, from time to time issue, a member of the Scheme may make additional voluntary contributions to the Scheme. Section 7(2) Subject to any guidelines issued under subsection (1), a member shall instruct the Government to deduct the additional voluntary contribution from his monthly pensionable emoluments.

Section 8. Obligations of the Government Section deduct a member’s monthly contribution from the member’s monthly salary;

Section 9. Establishment of Public Service Superannuation Fund Section 9(1) There is established a Fund to be known as the Public Service Superannuation Fund, which shall vest in and be operated and managed by the Board. Section 9(2)(a) into the Fund all contributions and any other payments required by this Act to be paid into the Fund; and Section 9(2)(b) out of the Fund, all the benefits and any other payments required under the provisions of this Act to be paid out of the Fund.

Section 10. Establishment of a Board of Trustees Section 10(1)(a) has at least twenty years or an aggregate of twenty years experience in a senior management position in the Public Service; and Section 10(1)(a)(i) has at least twenty years or an aggregate of twenty years experience in a senior management position in the Public Service; and Section 10(1)(a)(ii) is not in the service of any employers’ or worker’s representatives or any person affiliated to any of the organisations represented on the Board; Section 10(1)(b) the Principal Secretary in the Ministry for the time being responsible for matters relating to finance or a representative; Section 10(1)(c) the Principal Secretary in the Ministry for the time being responsible for matters relating to the public service or a representative; Section 10(1)(d) the Secretary to the Teachers Service Commission or a representative; Section 10(1)(e) the Secretary to the Public Service Commission or a representative; Section 10(1)(f) the Inspector-General of the National Police Service or a representative; Section 10(1)(g) one shall be nominated by the Kenya National Union of Teachers; Section 10(1)(g)(i) one shall be nominated by the Ken...

Section 11. Objects and functions of the Board Section collect contributions of members;

Section 12. Qualification for appointment Section 12(1) The Trustees appointed under section 10(1)(g) shall be appointed by virtue of their knowledge or experience in matters relating to the administration of scheme funds, banking, insurance, law or actuarial studies. Section 12(2)(a) has been convicted of a criminal offence, which questions his capacity to serve as a Trustee; Section 12(2)(b) is adjudged bankrupt or enters into a composition or arrangement with his creditors; or, Section 12(2)(c) is disqualified under the provisions of any other written law from appointment as such.

Section 13. Tenure of office Section 13(1) The Chairperson and the Trustees appointed under section 10(1)(g) shall hold office for a term of three years and may be eligible for re-appointment to a final term of three years. Section 13(2)(a) has been absent from three consecutive meetings of the Board without justifiable cause or the permission of the Chairperson; Section 13(2)(b) becomes bankrupt or makes a compromise with his creditors; Section 13(2)(c) is convicted of a felony or of any offence involving dishonesty or corruption; or Section 13(2)(d) becomes incapable of carrying out the functions of his office, either arising from an infirmity of mind or body. Section 13(3) A Trustee, other than an ex officio member, shall cease to be a member of the Board if the Trustee resigns from office by a notice, under his hand, addressed to the Cabinet Secretary.

Section 14. Filling of vacancy Section Whenever the office of a Trustee appointed under sections 10(1)(g) becomes vacant before the expiry of the Trustee’s term of office, the Cabinet Secretary shall, on the recommendation of the nominating body, appoint a person similarly qualified to fill the vacant position for the remainder of the term.

Section 15. Meetings of the Board Section 15(1) The Board shall meet not less than four times in every financial year and not more than four months shall elapse between the date of one meeting and the date of the next meeting. Section 15(2) The quorum for the conduct of the meetings of the Board shall be two thirds of the Trustees, of whom at least two shall be representatives of members and two representatives of the employers. Section 15(3) Unless a unanimous decision is reached, a decision on any matter before the Board shall be by a majority of the votes of the Trustees present and voting, and in the case of an equality of votes the Chairperson or person presiding shall have a casting vote. Section 15(4) The Board may invite any person who is not a member of the Board to participate in the deliberations of the Board, but such person shall not be entitled to vote. Section 15(5) Subject to this Act, the Board may regulate its own procedure.

Section 16. Committees of the Board Section 16(1) The Board may establish committees consisting of members of the Board to deal with such matters as the Board may specify. Section 16(2) The Board may co-opt persons who are not members of the Board to committees established under subsection (1) for a particular reason and such persons shall hold office for such period as the Board may determine. Section 16(3) Subject to any specific or general direction of the Board, a committee established under subsection (1) may regulate its own procedure.

Section 17. Disclosure of interest Section 17(1) If a member of the Board is present at a meeting of the Board or any committee of the Board at which any matter is the subject of consideration and in which matter the member or his dependants are directly or indirectly interested in a private capacity the member shall, as soon as practicable after the commencement of the meeting, disclose such interest and shall not, unless the Board otherwise directs take part in any consideration or discussion, or vote on any question relating on such matter. Section 17(2) A disclosure of interest made under this section shall be recorded in the minutes of the meeting at which it is made. Section 17(3) Failure to disclose such interest shall lead to the disqualification of the Trustee from holding office as a Trustee.

Section 18. Remuneration of Trustees Section The Chairperson and the Trustees shall be paid such sitting allowances or other remuneration for expenses as the Cabinet Secretary may, from time to time, approve.

Section 19. The Powers of the Board Section 19(1) In the exercise of its functions, the Board shall be accountable to the Government and to the members of the Scheme. Section 19(2)(a) control, supervise and administer the assets of the Fund in such manner and for such purposes as best promote the purpose of providing retirement benefits for members of the Scheme; Section 19(2)(b) determine the provisions to be made for capital and recurrent expenditure and for reserves of the Fund; Section 19(2)(c) receive contributions from members and authorize the custody, investment and administration of these contributions and the payment of retirement benefits as provided under this Act; Section 19(2)(d) enter into association with such other bodies or organizations within or outside Kenya as the Board may consider desirable or appropriate and in furtherance of the purpose for which the Fund is established; Section 19(2)(e) subcontract any of its functions to a person or firm with proven experience in the particular function being subcontracted; Section 19(2)(f) give such direction as it may consider necessary to give effect to the provisions of this Act; and Section 19(2)(g) do such other th...

Section 20. The Chief Executive Officer of the Board Section 20(1) There shall be a Chief Executive Officer who shall be appointed by the Board following a competitive process of recruitment and on such terms and conditions of service as shall be determined by the Board in the instrument of appointment or otherwise in writing from time to time. Section 20(2) No person shall be appointed as the Chief Executive Officer unless he has at least ten years experience in a managerial capacity in the retirement benefits, accounting, finance, investment, insurance or the banking sectors. Section 20(3) The Chief Executive Officer shall be the Chief Executive of the Board and be responsible to the Board for the management of the Fund. Section 20(4) The Chief Executive Officer shall, subject to the directions of the Board, be responsible for the day to day management of the affairs of the Fund. Section 20(5) The Chief Executive Officer shall be the Secretary to the Board of Trustees.

Section 21. Staff of the Board Section The Board may appoint such officers or members of staff as may be necessary for the proper discharge of the functions of the Board under this Act or any other written law, on such terms and conditions of service as the Board may determine.

Section 22. Delegation of powers Section The Board may, by resolution generally or in any particular case, delegate to the Chief Executive Officer, an officer, employee or agent of the Board, the exercise of any of the powers or the performance of any of its functions under this Act or under any other written law.

Section 23. The common seal Section 23(1) The common seal of the Board shall be kept in such custody as the Board may direct and shall not be used except by the order of the Board. Section 23(2) The common seal of the Fund shall, when affixed to a document and is duly authenticated, be judicially and officially noticed, and unless and until the contrary is proved, any necessary order or authorization by the Board under this section shall be presumed to have been duly given.

Section 24. Retirement Savings Account Section 24(1) The Administrator shall set up and maintain a retirement savings account for every member in the member’s name. Section 24(2) A member shall not have access to the funds held in the member’s retirement savings account or have any dealing with the Custodian with respect to the retirement savings account except through the Administrator. Section 24(3) The Custodian shall, upon receiving the contributions remitted under sections 6 and section 7, notify the Administrator who shall cause the contributions to be credited in the retirement savings account of the member in respect of whom the Government had made the payment.

Section 25. Vesting of benefits Section 25(1) All the benefits derived from contributions by a member shall immediately vest in the member. Section 25(2)(a) where a member dies while in the service of the employer the contributions by the Government to the member’s retirement savings account shall immediately vest in the dependants of the member; or Section 25(2)(b) where a member retires upon attaining the age of fifty years, the contributions by the Government to the member’s retirement savings account shall immediately vest in the member. Section 25(3) A member shall not withdraw the benefits vested on him under subsection (2) until the time he retires in terms of section 27 of this Act.

Section 26. Withdrawal from the retirement savings account Section his contribution and accrued interest in full, on leaving employment for any other reason; and

Section 27. Retirement from the service Section 27(1)(a) on attaining the age of sixty years, or where his exact date of birth is not known, on the 1st July in the year in which his sixtieth birthday is deemed by the Board to occur, which shall be the normal retirement age; Section 27(1)(b) on attaining the age of fifty years; Section 27(1)(c) before attaining the age of fifty years in accordance with the terms and conditions of his employment; Section 27(1)(d) from the disciplined services, on completion of service of a period exceeding twelve years but not exceeding twenty years after the officer, gives at least one month’s notice in writing of his intention to retire; Section 27(1)(e) on the abolition of his office; Section 27(1)(f) on compulsory retirement under subsection (4); Section 27(1)(g) on the advice of a Medical Board appointed by the Director of Medical Services certifying that the member is no longer mentally or physically capable of carrying out the functions of his office; or Section 27(1)(h) on termination of his service in the public interest, shall be entitled to make withdrawals in accordance with section 28. Section 27(2) The Medical Board may at the request o...

Section 28. Payment of retirement benefits Section 28(1) Where a member retires as provided in this Act the member may, on written request to the Administrator, withdraw a lump sum from the balance in his retirement savings account that shall not exceed the equivalent of one third of the balance: Provided that a member may withdraw any additional voluntary contributions made into the Scheme and accrued interest in full. Section 28(2)(a) monthly or quarterly withdrawals calculated by an actuary on the basis of an expected life span and payable out of the Fund; or Section 28(2)(b) a monthly or quarterly annuity for life purchased from a life insurance company of a member’s choice; Section 28(3)(a) a debt due to the Government; or Section 28(3)(a)(i) a debt due to the Government; or Section 28(3)(a)(ii) an order of any court for the payment of periodical sums of money towards the maintenance of the wife, or former wife, or minor child, of the officer to whom the pension, gratuity or other allowance has been granted; Section 28(3)(a)(iii) a cause for assignment approved by the Retirement Benefits Authority; or Section 28(3)(b) liable to be attached, sequestered or levied upon for or in...

Section 29. Particulars of member and dependants of the member Section 29(1) Every member shall furnish the Administrator in the prescribed manner, with the particulars relating to the member and the dependants of the member for the purpose of receipt of benefits upon the member’s death. Section 29(2) A member may update the particulars furnished under subsection (1) at any time and in any event, at least three years before his retirement, and such revised. Section 29(3) Where upon the death of a member the benefits are paid to a person validly nominated under this section, no other person shall have any other claim to the benefits against the Scheme. Section 29(4) Where a dispute relating to a nomination under this section arises, the Board shall have the absolute powers to consider evidence presented and determine the rightful dependant.

Section 30. Death of a member Section Where a member dies whilst in employment, the Administrator shall apply the entitlements of such member under the life insurance policy maintained under section 6 (4), in accordance with section 28 in favour of the dependants of the deceased or, in the absence of such dependants, to the executor or the administrator of the estate of the deceased.

Section 31. Missing member Section 31(1) Notwithstanding anything to the contrary contained in any other law, where a member is missing and it is proved that the member has not been heard of for seven years by those who might reasonably be expected to have heard of the member if he were alive, there shall be a rebuttable presumption that the member is dead and the provisions of section 30 shall apply. Section 31(2) Where it is confirmed that the missing member is dead, the provisions of section 30 shall apply.

Section 32. Death in retirement Section 32(1) Where a member who was married at the date of his retirement, and was receiving a retirement benefit under section 28(2)(b), dies while in retirement, a pension that is equivalent to the unutilized balance of his retirement savings account shall, be paid to his dependants. Section 32(2) The payment under subsection (1) shall be made to the dependants commencing from the day following the member’s death.

Section 33. Transfer of service Section Where a member transfers his service within the public service, or from the Government to a county government and vice versa, the same retirement savings account shall be maintained for the member.

Section 34. Prohibited payments out of the Scheme Section to the Government without the prior written consent of the Retirement Benefits Authority; or

Section 35. Appointment and functions of the Administrator Section 35(1)(a) open a retirement savings account for each member with a personal pension number; Section 35(1)(b) credit the member’s retirement savings account with the contributions each month; Section 35(1)(c) inform the employer where a member’s contribution details differ from the expected; Section 35(1)(d) provide customer service support to members, including access to member’s account balances and statements on demand; Section 35(1)(e) cause to be paid retirement benefits to member who has retired in accordance with the provisions of this Act; Section 35(1)(f) be responsible for all calculations relating to retirement benefits; and Section 35(1)(g) carry out any other functions as may be directed by the Board from time to time. Section 35(2) The Administrator shall ensure that all income earned from the investment of the Fund is distributed to the credit of the members’ retirement savings accounts save for clearly defined and reasonable fees, charges, costs and expenses of transactions approved by the Board or any income set aside by the Board and deposited into the reserve account maintained under section 41.

Section 36. Appointment and functions of the Manager Section develop an investment strategy for the Fund for the approval of the Board;

Section 37. Appointment and functions of the Custodian Section receive the total contributions remitted by the employer under section 6 on behalf of the Board;

Section 38. Duty of care Section ensure that the Scheme and the Fund are at all times managed or held in accordance with the provisions of this Act, Regulations or guidelines made under the Act and any directions issued by the Retirement Benefits Authority;

Section 39. Administrative expenses of the Fund Section the initial take off grant out of moneys provided by Government for the expenditure incurred by the Board in the exercise of its powers or the performance of its function under this Act;

Section 40. Investment of surplus funds Section 40(1) The Board may invest any surplus funds held in the account established under section 39 in securities approved by the Cabinet Secretary for the time being in charge of matters relating to finance. Section 40(2) The Board may place on deposit with such bank or banks as it may determine any moneys held in the account established under section 39 that are not immediately required for the purposes of the administration of the Fund.

Section 41. Reserve Account Section 41(1)(a) any special contribution paid into the Fund by the Government for the purpose of improving the benefits of the members; and Section 41(1)(b) any income of the Fund that the Board determines should be set aside to stabilise the returns to members subject to a maximum of ten per cent of such income: Section 41(2) Any sums of money determined to be income of the reserve account shall be treated as income forming part of the general income of the Fund.

Section 42. Financial year Section The financial year of the Fund shall be the period of twelve months ending on the 30th June in each Year.

Section 43. Annual estimates Section 43(1) Before the commencement of each financial year, the Board shall cause to be prepared estimates of revenue and expenditure of the Fund for that year. Section 43(2) The annual estimates shall be prepared at least three months before commencement of the financial year to which they relate and shall be submitted to the Board for approval, and after such approval, the Fund shall not increase the annual estimates without the consent of the Cabinet Secretary. Section 43(3)(a) the payment of the salaries, allowances and other charges in respect of the staff of the Fund; Section 43(3)(b) the payment of pensions, gratuities and other charges in respect of the retirement benefits due to the staff of the Fund; Section 43(3)(c) the proper maintenance of the buildings and grounds of the Fund; Section 43(3)(d) the maintenance, repair and replacement of the equipment and other property of the Fund; Section 43(3)(e) the creation of such reserve funds to meet future or contingent liabilities in respect of retirement benefits, insurance or replacement of buildings or equipment, or in respect of such other matter as the Board may deem appropriate; and Section...

Section 44. Accounts and audit Section 44(1) The Board shall cause to be kept all proper books and records of account of the income, expenditure and assets of the Fund. Section 44(2) The Board shall cause accounts of the Fund to be prepared and be submitted for auditing and reporting annually by the Auditor-General in accordance with the Public Audit Act (Cap. 412B).

Section 45. Actuarial valuation of the Fund Section 45(1) The Fund shall be valued at intervals not exceeding five years by an actuary appointed by the Board. Section 45(2)(a) prepare a report on the state of the Fund; and Section 45(2)(b) recommend any necessary action to be taken. Section 45(3) The actuary shall submit the report prepared under subsection (2) to the Board. Section 45(4)(a) increase or decrease the rates of contribution payable in respect of members; or Section 45(4)(b) take any other action recommended by the actuary.

Section 46. Offences by individuals Section Any person who fails to discharge any duty or obligation required of such person by any provisions of this Act commits an offence and, except in the case of a body corporate, is liable on conviction to a fine not exceeding five hundred thousand shillings or to imprisonment for a term not exceeding two years or both fine and imprisonment.

Section 47. Offences by body corporate Section Where a body corporate fails to discharge any duty or obligation required of such body corporate by any provision of this Act, the body corporate and every director or officer who had knowledge of the duty or obligation and did not exercise due diligence to ensure execution of the duty or obligation as stipulated under this Act commits an offence and is liable on conviction to a fine not exceeding five million shillings or to imprisonment for a term not exceeding five years or both.

Section 48. Misappropriation of assets Section Any employee of the Fund, manager, administrator or custodian who misappropriates the assets of the Fund commits an offence and is liable on conviction to a fine of an amount equal to three times the amount misappropriated or imprisonment for a term not exceeding seven years or both.

Section 49. Removal from office Section Notwithstanding the provisions of any other law, the Cabinet Secretary may in addition to the penalties stipulated under this Act, cause to be removed from office any trustee or employee of the Fund who is convicted of an offence under this Act.

Section 50. Government of Kenya Public Service Superannuation Bond Section 50(1)(a) already covered under any other pension scheme existing before the commencement of this Act and whose benefits are payable out of the Consolidated Fund; and Section 50(1)(b) a member of the Scheme shall be recognized in the form of an amount acknowledged through the issuance of a letter recognizing accrued benefits at the date of joining the scheme under this Act. Section 50(2) Deleted by ActNo. 14 of 2015, s. 54(b) . Section 50(3) Deleted by ActNo. 14 of 2015, s. 54(b) . Section 50(4) Deleted by ActNo. 14 of 2015, s. 54(b) . Section 50(5) No member who is entitled to benefits under this Act shall have any other recourse to a benefit payable out of the Consolidated Fund at the commencement of this Act or any later date of joining the Scheme established under this Act. [Act No. 14 of 2015 , s. 54.]