NSSF Deductions Increase Plan Underway
The Court of Appeal in Kenya has ruled in favor of the National Social Security Funds (NSSF) Act 2013, which requires mandatory contributions from Kenyans towards their social security upon retirement.
This ruling sets aside a previous decision by the Environmental and Labour Court that had deemed the act unconstitutional.
President William Ruto has been pushing for an increase in workers’ monthly contributions, and this ruling provides him with the support he needs to implement his plan.
Under the NSSF Act 2013, employed Kenyans are required to contribute six percent of their earnings towards the fund, with their employers matching the same amount.
For example, an employee earning a pensionable income of Ksh 20,000 would contribute Ksh 1,200, with their employer remitting the same amount to the Pension Fund.
However, the Kenya Tea Growers Association, Agricultural Employers Association, Kenya County Government Workers Association and six others challenged the implementation of the act in court, claiming that it granted NSSF a monopoly in the pension industry, contrary to the laws on fair competition.
In September 2022, President Ruto called for a revision of the country’s pension contribution rates, stating that the current Ksh 200 monthly remittances were inconsequential.
The recent ruling by the Court of Appeal means that Kenyans will now have to part with more money to guarantee their social security upon retirement.
The court stated that the trial court had no jurisdiction to entertain the matter and set aside the entire judgement from September 19, 2022, and all the subsequent orders. Each party will bear its own costs for the appeal.
In conclusion, the recent ruling by the Court of Appeal in Kenya on the NSSF Act 2013 will have significant implications for Kenyans, who will now be required to contribute a higher amount towards their social security upon retirement.
This ruling provides President Ruto with the support he needs to increase workers’ monthly contributions, which he has been pushing for, and highlights the need for more clarity and fairness in the pension industry.
NSSF Deductions Increase Plan Underway