New Bill could allow civil servants to access entire pension upon exit
Under the current system, government contributions only fully belong to an employee after a decade of service, and withdrawals are limited until age 50 or retirement.
Civil servants who leave the public service before reaching retirement age may soon have full access to their pension savings, thanks to a Bill before Parliament.
The Public Service Superannuation Scheme (Amendment) Bill, 2025, sponsored by Majority Leader Kimani Ichung’wah, aims to remove long-standing obstacles that have kept employees from accessing funds they have contributed to, often for years.
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Under the current system, government contributions only fully belong to an employee after a decade of service, and withdrawals are limited until age 50 or retirement.
The Bill seeks to overturn this, allowing members to claim every shilling they have earned, including both personal and government contributions, immediately upon leaving employment.
“All retirement savings shall immediately vest in a member,” the legislation reads, highlighting its aim to guarantee full ownership of pension funds from day one.
The proposed law addresses frustrations faced by thousands of teachers, police officers, and other public servants who queue for years at pension offices, waiting for delayed payouts.
It grants workers the option to either withdraw their accumulated savings as a lump sum or transfer them to another registered pension plan.
“A member may access accrued retirement savings on leaving employment before retirement in accordance with the Retirement Benefits Act,” the Bill states.
Recognising the administrative weaknesses of the current scheme, the Bill introduces measures to ensure the timely remittance of contributions.
Employers, including the Teachers Service Commission, National Police Service, and Public Service Commission, would be required to remit deductions “not later than ten working days after the end of the month,” with penalties applied for non-compliance based on the scheme’s previous year’s rate of return.
The legislation also seeks to strengthen governance by restructuring the board of trustees, including representatives from key unions such as the Kenya National Union of Teachers (KNUT) and the Union of Kenya Civil Servants.
This change is meant to make management of the fund more accountable and responsive to the interests of all public servants.
Additionally, annual general meetings would be held six months before the close of each financial year, ensuring transparency and enabling members to be fully informed about the fund’s operations.
Beyond improving accessibility and governance, the Bill introduces flexible payout options. Members could choose structured withdrawals instead of lump sums, giving them greater control over their retirement funds.
If enacted, the reforms could mark a major shift in Kenya’s public service pension system, ending long delays, guaranteeing ownership of contributions, and streamlining administration for hundreds of thousands of employees
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