NSSF monthly deductions raised to Ksh.2,060 up from Ksh.200 as new saving plan to take effect

Three Appellate judges Hannah Okwengu, Mohamed Warsame and John Mativo set aside a High Court order issued in September last year, declaring the NSSF Act 2013 unconstitutional, citing a lack of public participation and non-concurrence by the Senate during the legistlative process. 

By declaring the NSSF Act 2013 legal and constitutional, three Court of Appeal judges last Friday ended a legal combat that raged on from 2014.

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 legistlative process.

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.

Those earning less than ksh.15,000 every month 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. 

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.