Defined Contribution
The PSSS is a Defined Contribution Scheme where the Government and employees contribute to the Scheme to fund the retirement benefits of the employee.
The contributions are paid into the Fund established and managed under the Act and regulated in accordance with the Retirement Benefits Act.

Rates of Contribution
Employees contribute at the rate of 7.5 % of their monthly basic salary graduated at the following rates: 2% in first year (2021); 5% in the second year (2022); and 7.5% in the third year (2023).
The Government contributes 15% of the monthly basic salary in respect of each employee.
Employees have the option to make additional voluntary contributions to the scheme above the mandatory 7.5% of the basic salary. Where an employee takes this option, the Government does not increase its contribution.

Portability
The benefits under the new contributory Scheme are portable and therefore an employee can transfer accrued pension benefits from one registered scheme to another of a similar nature irrespective of the sector (private or public).

Access to Benefits before Retirement
Members of the scheme may access retirement benefits earlier than the prescribed Retirement Age by reason of dismissal, resignation, ill health, mortgage finance, advancement for the purchase of a residential house, immigration, death or any other circumstance as may be prescribed in the Act.

Regulation of the Scheme
The contributory Scheme is regulated by the RBA.

Tax Relief
The Contribution is deducted from the salary before tax is calculated. Members can enjoy tax benefit to a maximum of the lesser of Kshs. 20,000 or 30% of pensionable emoluments.

Life Insurance and Disability Cover
The Act provides for a Life Insurance Policy that has disability benefits in favour of every member of the scheme, for a minimum of five times of the members annual pensionable emoluments. This cover is currently provided by government under respective employers.

Terms of Commutation
Under the Scheme a member can withdraw up to a maximum of a third of the accumulated savings upon retirement. A member can also withdraw all the additional voluntary contributions with accrued interest.

Member Involvement
The Scheme ensures involvement of the employees and pensioners in the
management of their retirement fund through participation in the Board of Trustees in accordance with the Act.