Old Pension Scheme vs PSSS
S/No. |
Old pension Scheme |
The new Contributory Scheme |
1. |
Retirement benefits are paid on a set formula |
Retirement benefits are paid from the accrued contributions and investment income |
2. |
Not portable since accrued benefits are not transferrable |
Portable since accrued savings are transferrable |
3. |
Pension Vesting period is 10 years and on attainment of 50 years of age |
Vesting period is 5 years no age limit
|
4. |
There is no employee participation |
Employees participate through representation in the Board of Trustees and Annual General Meetings |
5. |
Payment of the benefits is from the Consolidated Fund. |
Payment shall be from the Fund |
6. |
Pension commutation is limited to a ¼ of the accrued pension |
Pension commutation is limited to a 1/3 of accumulated credit |
7. |
Dependant pension payment is prescribed and paid only to a widow and children |
Annuity is paid as per principal member preference. |
8. |
Managed by the National Treasury |
Administered by a Board of Trustees and regulated by the Retirement Benefits Authority |
9. |
The accrued retirement benefit cannot be accessed while in service, hence not applicable for personal development. |
• Allows a member to access 40% of the accrued savings to purchase a residential house. • Members can access their accumulated savings upon exit subject to the vesting period |
10. |
Employee does not contribute |
Employee contributes promoting a saving culture |
11. |
Benefits are defined and cannot be enhanced |
Employee can enhance the benefits through additional voluntary contributions |