Civil servants will from this month be deducted 7.5 per cent of their salaries for their pension contribution, lowering the benefits of the pay increase that took effect on July 1.Director of Pensions Shem Nyakutu said that the new scheme would start at the end of July, coinciding with the salaries review to avoid reducing the civil servants pay.“We have timed it with salary increment so there is no need for gradual deductions. But more importantly, we are solving a pending pension crisis because the budget was growing too fast and we could not wait any longer,” Mr Nyakutu said.Civil servants are in line for a basic pay increase of between 16 and 30 per cent in a review that will cost taxpayers Sh20 billion this year.Civil servants were initially to contribute two per cent of their monthly salary to the scheme in the first year, five per cent in the second and 7.5 per cent from the third year.The government will match the contributions with an amount equivalent to 15 per cent of every worker’s monthly pay.This is in addition to the Sh17.9 billion the State allocated as seed capital for the new fund for investments.

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