Employers want NSSF Act suspended pending rules

June 18, 2014
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FKE Chairman Linus Gitahi says the envisaged changes do not provide employers the choice to exercise the alternative to opt out of remitting Tier Two contributions to NSSF by giving 60 days notice request to the Retirement Benefits Authority/FILE
FKE Chairman Linus Gitahi says the envisaged changes do not provide employers the choice to exercise the alternative to opt out of remitting Tier Two contributions to NSSF by giving 60 days notice request to the Retirement Benefits Authority/FILE
NAIROBI, Kenya, Jun 18 – The Federation of Kenyan Employers is calling for the suspension of the new National Social Security Fund Act until the rules and regulations as per the Act are gazetted.

FKE Chairman Linus Gitahi says the envisaged changes do not provide employers the choice to exercise the alternative to opt out of remitting Tier Two contributions to NSSF by giving 60 days notice request to the Retirement Benefits Authority.

Gitahi says the government needs to ensure a smooth implementation to gain the goodwill of employers to implement the enhanced contributions.

“This note does not to address the issue of opting out and in fact it is in our view that the two contributions including gazetting rules by RBA which is in the process of been done should not be rushed and therefore we really take exception of asking that this happens from June when all these conversation has now finished so that we can know how we have a long term sustainable contributions by employers,” he said.

“FKE has made several efforts to get a copy of the gazette notice of the rules and regulations and to date I have not seen a copy. We wonder on what basis the NSSF is asking employers to make those remittances.”

FKE Executive Director Jacqueline Mugo says with the immediate issuing of the NSSF rules and regulations would have enabled employers to opt out from contributions.

“In essence the employers have no opportunity to apply to the RBA to opt out of Tier Two. Without that option being given to employers then the federation finds it very difficult to support the contributions of the Tier Two to the NSSF because that in essence means employers are locked in and even those who run pension skims have no option but to contribute to the NSSF,” she said.

“We are not in a position to advise employers to make contributions if they are not backed by law and due process. The Labour Minister has powers to make these changes to ensure that employers and workers have ample time to organise themselves owing to this unfortunate delay.”

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