‘Comply with immediate effect!’ NSSF tells all employers on new Ksh.2,160 monthly rates.

The National Social Security Fund (NSSF) has asked all employers to immediately comply with the court verdict that allowed an increase in monthly deductions as outlined by the NSSF Act 2013 to take effect.

In a statement issued on Friday, NSSF Chairman Antony Munyiri said: “The Employers who have been complying with the NSSF Act No. 45 of 2013 Act should continue doing so, while those who are not should comply as advised”.The new rates will see both employee and employer contribute a total of Ksh.2,160 up from Ksh.200.

According to NSSF, every employer will be required to remit the new amount by the 9th of every month.This comes after three Court of Appeal judges, Hannah Okwengu, Mohamed Warsame and John Mativo set aside a High Court order issued in September last year that had declared the NSSF Act 2013 unconstitutional, citing a lack of public participation and non-concurrence by the Senate during the legislative process.

By declaring the NSSF Act 2013 legal and constitutional, three Court of Appeal judges last Friday ended a prolonged legal battle that had raged on since 2014.On the other hand,Kenya Tea Growers Association and 14 others had moved to the High Court, contesting the new law, claiming public participation was not carried out effectively and the senate was not involved in the legislative process.

However,the appellate court held that the Employment and Labour Relations Court had no jurisdiction to hear and determine the matter.NSSF through its board chairman Anthony Munyiri welcomed the court of appeal decision, paving the way for implementation of the NSSF Act 2013 and effecting new monthly deductions.

For some employees who were parting with Ksh.200 every month as statutory deductions, their contribution to NSSF will immediately rise ten-fold. Their employers will match the monthly contributions and those earning less than ksh.15,000 monthly will be required to part with ksh.350 per month. Those earning Ksh.15,000 will be deducted ksh.900 per month, while those with a monthly income of Ksh.18,000 and above will be deducted ksh.1,080 an amount their employers will match.Thus,some Ksh.3,000 will be deducted from those earning at least Ksh.50,000 per month. This is a 6% deduction on their monthly income, and a similar contribution from employers, making it a total of 12% per month.
The NSSF board chairman termed the new deductions a significant milestone and win for Kenyan workers that enables them to enhance their savings and secure their financial future and ensure that they retire with dignity.

The court of appeal decision boosts President William Ruto’s push for higher retirement savings to at least 25%, up from the current 12%. An increase he says will help create a pool of funds that the government can borrow to finance infrastructure development at affordable interest rate and reduce the country’s appetite for expesive foreign debt.

The NSSF Board of Trustees Chairman, Mr. Anthony Munyiri, implies that Employers are required to remit the said member monthly contribution to the Fund by the 9th of every month.

Article By Suzy Nyongesa.