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NSSF Acting Managing Trustee Richard Langat noted that Kenyans are still being misguided on calculation of the contributions rate and the benefits offered to members as stipulated in the new law/FILE

Kenya

NSSF educates consumers on new Act

NSSF Acting Managing Trustee Richard Langat noted that Kenyans are still being misguided on calculation of the contributions rate and the benefits offered to members as stipulated in the new law/FILE

NSSF Acting Managing Trustee Richard Langat noted that Kenyans are still being misguided on calculation of the contributions rate and the benefits offered to members as stipulated in the new law/FILE

NAIROBI, Kenya, Mar 4 – The National Social Security Fund (NSSF) has embarked on a countywide consumer awareness campaign to educate Kenyans on the provisions of the new NSSF Act.

The drive is geared towards enabling Kenyans and stakeholders from all sectors of the economy to embrace the new Act and clear misconceptions.

The campaign will focus on key provisions including members’ contributions, registration, benefits and will run until June when the Act is set to be implemented.

NSSF Acting Managing Trustee Richard Langat noted that Kenyans are still being misguided on calculation of the contributions rate and the benefits offered to members as stipulated in the new law.

“In the recent past, Kenyans have raised concerns of discontentment regarding the new Act especially the new contribution rates which are to be effected from June 1 this year. As the sole national fund charged with the responsibility of providing social security cover for all Kenyans through the new Pension Fund, we are stepping up to educate employers, employees and all Kenyans about the New Act so that they understand and be prepared for it when key provisions of the Act will be effective,” said Langat.

Under the new Act, any person employed in Kenya and subject to the Employment Act must contribute to the new pension scheme.

Every employer must also make contributions in respect of their employees.

An employee is required to contribute at the rate of six percent of the pensionable earnings up to a maximum of the upper earnings limit which currently stands at Sh18,000 with a lower limit of Sh6,000 while the employer is to contribute the same rate of six percent of the employee’s pensionable earnings, bringing the total contribution rate to 12 percent.

This means the contributions will be divided into two levels of accounts referred to as Tier I (the basic amount will be up to Sh720 from both the employer and employee) and Tier II (maximum amount of up to Sh1,440 from both employer and employee).

Langat further added that the Act will provide an expanded social security to include all Kenyans into the pension scheme, pointing out that unlike previously, the new NSSF pension fund enables all public servants including the military, the police and teachers to contribute.

Other benefits include; use of the contributions for mortgage collateral, survivors benefit, funeral grants and emigration benefits.

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Workers in the informal sector who volunteer to join the scheme stand to enjoy similar benefits.

The NSSF Bill 2013 was passed into law by the President on the December 27, 2013 and it was to be effected in January 2014. However, key provisions of the Act (section 20 and 21) were later suspended by the Cabinet Secretary of Labour until June this year.

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