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Pension Calculations for Teachers; How Much Pension Do Kenyan Teachers Get?

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Pension Calculations for Teachers; How Much Pension Do Kenyan Teachers Get?

Pensions are a vital part of any teacher’s financial future, providing a source of income during retirement.

In Kenya, the Teachers Service Commission (TSC) manages the pension scheme for educators. Understanding how pension calculations work is crucial for teachers planning their retirement.

In Kenya, teaching is regarded as a secure profession, with teachers receiving benefits such as health insurance and a pension.

Teachers receive a substantial stipend at the end of their careers and are guaranteed a monthly stipend as a pension in exchange for their service. Everything you need to know about the new TSC pension scheme is right here.

TSC retired teachers pensions

So, how much do Kenyan teachers get in terms of pension? Previously, teachers were not required to contribute to their pensions, and their benefits were paid directly from taxes. 

1. Contribution Rates and Service Years:

The amount of pension a Kenyan teacher receives depends on several factors, including the number of years in service and the contribution rate.

Teachers contribute a portion of their salary towards their pension fund throughout their careers. The longer the service period and the higher the contributions, the larger the pension.

2. Pensionable Salary:

The pensionable salary is a critical factor in calculating the pension. It’s typically the average salary of the highest-earning 36 months (three years) of service for teachers who joined service before 2007. For those who joined after 2007, it’s the average salary of the last 12 months of service.

3. Accrued Benefits:

A teacher’s pension is calculated based on their accrued benefits. Accrued benefits take into account the total contributions made by the teacher and the employer during their service years. The formula typically used is 7.5% of the member’s pensionable salary plus 15% of the employer’s contribution.

4. Commutation:

Teachers have the option to commute a portion of their pension, usually up to 25%. When a teacher commutes part of the pension, they receive a lump sum amount, and the remaining portion is paid as a monthly pension. The commuted amount affects the final pension amount.

5. Taxation:

Pension income in Kenya is subject to taxation. The amount of tax depends on the pensioner’s total income, including any other sources of income they may have during retirement.

6. Other Factors:

There are additional factors that can affect pension calculations, such as disability benefits, spouse benefits, and any outstanding loans or obligations.

7. Consultation with TSC:

For precise pension calculations and guidance, it’s advisable for teachers to consult with the TSC. The TSC can provide personalized information and assistance to ensure teachers have a clear understanding of their expected pension amount.

How TSC Pension Works

Traditional pensions were based on the teacher’s years of experience as well as a measure of the final average salary, which is usually the average of the teacher’s salary in the three to five years preceding retirement.

There was no set pension amount for retired teachers. Typically, the amount of a teacher’s pension is determined by the number of years of service. 

The pension was then calculated by multiplying the number of years of service by the average salary of the teacher.

When the result was 80 times over, it produced a lump sum that was three times the pension. In an unexpected turn of events in 2021, teachers’ take-home pay was reduced by 7.5 percent as they began contributing to their pension savings plan. 

A portion of their salaries is deducted for remittance to the Public Service Superannuation Scheme (PSSS). 

All new teacher employees below the age of forty-five are subject to PSSS membership. Those who exceed forty-five years old will only be able to join the scheme if they opt to do so by filling out the PSSS forms. 


How does the TSC pension work? To figure out my teachers’ pension, specifically the service pension plus commuted pension,

Take one-fourth of the final pensionable emoluments for each completed month of pensionable service, up to a maximum of the highest pensionable salary drawn during service, i.e.

(Completed month x annual salary) / 480 

This means that if you have 10 years of pensionable service and a final salary of Ksh. 420,000 per annum, you would be eligible for; 10 years x 12 months x Ksh. 420,000 per annum/480 = Ksh. 105,000 per annum.

Retirement Benefits

Teachers also get other benefits upon retirement under the provisions of the Pensions Act.

The benefits are typically provided at no cost, and they are not required to contribute a portion of their salary in order to receive these rights. 

Pension calculations for Kenyan Teachers

Pension Calculations for Teachers; How Much Pension Do Kenyan Teachers Get?

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