Ruto proposes Sh3,000 top-up for every Sh6,000 saved on NSSF - Capital Business
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President William Ruto /FILE/State House

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Ruto proposes Sh3,000 top-up for every Sh6,000 saved on NSSF

NAIROBI, Kenya, Sep 29 — President William Ruto has reaffirmed his government’s resolve to re-engineer the country’s saving scheme to bridge the investment-savings deficit.

Ruto said that the current social security infrastructure in the country including the National Social Security Fund (NSSF) and private saving schemes only cater to people in formal employment leaving out a bulk of Kenyans in the informal sector.

“There is no retired Kenyan today who is living on their NSSF retirement benefits. The meager current contribution of Sh200 a month adds up to Sh72,000 over 30 years. There is no rate of return on earth that can grow this into an adequate pension,” Ruto said Thursday when he made his first official statement to a joint sitting of parliament.

“We just have to be honest with ourselves. You cannot pretend you are saving by saving Sh200 bob and it happens across board,” he added.

The Head of State said his administration intends to overhaul the social security infrastructure in the country to make it more inclusive.

To encourage those excluded to save, Ruto said that he will be proposing a national savings drive to encourage those in the informal sector to set up their retirement savings plan.

“For every Sh2 saved in the scheme up to a maximum of Sh6,000 per year, the government will contribute a shilling for every Sh2 saved. Meaning every Kenyan who will save Sh6,000 a year, the government will give them Sh3,000 per year,” he said.

Ruto’s remarks were a follow-up to comments he made on September 25 when said that the State will comply with the recommendations of the Employment and Labour Relations Court regarding certain provisions of the Act.

Ruto said his administration had read through a ruling by the three-judge bench which declared the NSSF Act null and void as a result ordering a prohibition of mandatory deductions from employees.

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The ruling delivered on September 23 faulted the Jubilee Government for failing to get approval from the Senate despite the law affecting both the county employees and the budgets of the 47 devolved units.

The Head of State said his administration will be working with the Senate and the National Assembly to provide a framework for saving in Kenya.

“I know there was a ruling this week by the court on matters to do with savings in our country, they have told us to do certain things including to go back to the Senate so that we can proceed together, that we are going to do because saving is a must,” he said.

Ruto attributed the country’s over-dependence on foreign borrowing to a lack of saving culture in the country which has raised the country’s debt ceiling.

“Part of the reason why we have borrowed heavily from others is because we have not been prudent in saving for our own country. We have to be prudent about saving. It is Biblical to save,” he said.

The Head of State said that the current saving rate capped at Sh200 is very low to build savings that will sustain the country in the running of its day-to-day operations and spur growth and development.

“Do you know that everybody who works today in Kenya saves only Sh200 every month, not Sh2000 even those who earn Sh1 million. And somebody has gone to say it should stay like that. That is not what savings is all about,” he said.

President Ruto said he would work to free the country from being what he described as “slaves to our lenders.”

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