NSSF’s Ksh2,160 Deductions Hit Snag at Supreme Court
The National Social Security Fund (NSSF) has encountered another obstacle in its efforts to increase monthly deductions to Ksh2,160.
The Supreme Court has challenged the directive, following a petition by the County Pensioners Association. The government, under President William Ruto’s administration, supported the increased deduction in order to foster a savings culture among Kenyans.
The County Pensioners Association has asked the Supreme Court to halt the NSSF’s directive, as the new deductions were to be implemented with February salaries.
According to the association, workers would be the most affected by the directive, as other employers had better pension schemes and would likely choose those over the NSSF.
The association explained that workers would suffer substantial and irreparable harm, including a run on pension schemes superior to the NSSF, unless the court stops the implementation of the disputed act pending the hearing and determination of the appeal.
In addition, the lobby group stated that the Court of Appeal, which upheld the enforcement of the 2013 Act, was not considerate of workers in its ruling. The Supreme Court has yet to issue a directive on the matter.
NSSF’s Ksh2,160 deductions were scheduled to begin in February 2023, with employees contributing half of the new rate. Despite opposition from several workers’ groups, the Central Organisation Trade Union (COTU) supported the new deductions, with COTU boss Francis Atwoli stating that employees would benefit.
Atwoli explained that many workers have only been contributing to and receiving funds from the provident fund, which is a lump sum payment that workers have been receiving at a go (Tier 1 – provident fund).
In conclusion, the County Pensioners Association has filed a petition with the Supreme Court to overturn the NSSF’s directive to increase monthly deductions to Ksh2,160.
The government supported the directive in an effort to create a savings culture among Kenyans. While the Central Organisation Trade Union (COTU) backed the new deductions, the County Pensioners Association has argued that workers would be the most affected, as other employers had better pension schemes.
NSSF’s Ksh2,160 Deductions Hit Snag at Supreme Court
