Starting this month, Kenyans must pay at least Sh2,000 from their paychecks into the National Social Security Fund (NSSF), up from the usual Sh200.
According to a decision by the Court of Appeal, members will henceforth contribute 6% of an employee’s salary, and the employer will match that amount. Judges John Mativo, Mohamed Warsame, and Hannah Okwengu of the Appeal Court determined that the NSSF Act of 2013, which attempted to raise monthly contributions from Sh200 to Sh2,000, is lawful.
The Labour and Employment Relations Court declared the bid unconstitutional, null and void in September 2022, claiming that the NSSF Act, 2013, violated the Constitution because there was no public participation prior to its enactment. The decision comes after President William Ruto publicly stated that the amount should be increased in order for Kenyan employees to save a reasonable amount.
“The majority of those who are registered with the NSSF are paying Sh200, which is absurd. I don’t really know what we are doing; we just received a judgement from the court a week ago that it is improper for us to raise it from Sh200. Do we both reside in the same nation?” Ruto then said.
According to Ruto, NSSF and him had agreed to ask the court to reevaluate its decision.
“We are unable to keep borrowing on other people’s savings. We must use our savings to develop our nation. Let’s take a loan against our money so we can pay interest to our lenders, Ruto remarked.
The Federation of Kenya Employers stated in November 2022 that the projected increase in NSSF contributions should be spread out over five years.
The new rates will be easier for companies and employees to adjust to, according to FKE, who also said that it should be implemented in accordance with “statutory minimums.”
As social security stakeholders voiced concerns about the implementation of the NSSF Act 2013, the case had been in court since 2014.