Section of Workers Face Further Salary Deductions in New Law

Jukwaa

🇰🇪 Breaking It Down

The County Governments Retirement Scheme Bill, 2026, which is currently before Parliament, seeks to establish a uniform retirement benefits framework for eligible county state officers, public officers and employees.

The proposed contribution would come alongside deductions such as NSSF, SHIF, the Affordable Housing Levy and PAYE, although the pension contribution would be directed towards the worker's retirement savings rather than being a tax.

For a county employee earning Ksh50,000 in pensionable emoluments, the proposed 7.5 per cent contribution would amount to Ksh3,750 every month, meaning the employee's salary would have an additional Ksh3,750 set aside before other applicable deductions are factored in.

📌 What You Need to Know

The Bill proposes that every member of the scheme contribute not less than 7.5 per cent of their pensionable emoluments for as long as they remain employed by a participating sponsor.

"A member shall, so long as the member remains in the employment of a sponsor, contribute to the Scheme a sum not less than seven and a half per cent of the pensionable emoluments of the member," the Bill states.

The financial burden would, however, not fall entirely on employees, with county governments and other sponsors required to make their own contributions to the scheme.

Under the proposed framework, an employer would contribute up to twice the employee's contribution or 20 per cent of the worker's pensionable emoluments, whichever is lower.

This means an employee contributing 7.5 per cent could receive an employer contribution of up to 15 per cent.

Further, the retirement scheme sponsored by Majority Leader Kimani Ichung’wah also proposes that contributions owed by a county government be charged directly to the County Revenue Fund as a first charge, potentially giving pension payments priority over other county expenditure.

📰 Source: Kenyans.co.ke

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