NAIROBI, Kenya, Feb 10 — Trade unionist Francis Atwoli has welcomed the implementation of new National Social Security Fund (NSSF) rates, as outlined in the NSSF Act 2013.
The Secretary General Central Organization of Trade Unions (COTU) made the comments on Friday alluding to the upward revision of rates from Sh200 to Sh2,160 for employees earning above Sh18,000.
His sentiments came a day after the NSSF Board of Trustees directed all employers to comply with the NSSF Act No. 45 of 2013.
This followed a ruling by the Court of Appeal that upheld the Act as legal, allowing the government to move forward with its implementation.
“Consequently, the move to effectively implement the NSSF Act, 2013 is welcome considering it makes it mandatory for employers to ensure that workers have a provident fund and pension scheme,” Atwoli stated.
He clarified that NSSF deduction is not tax, as beneficiaries will be able to access the funds upon retirement or as provided for by the NSSF Act, 2013.
Atwoli however called upon the NSSF Board of Trustees to appoint a very competing managing Trustee, devoid of corruption.
Different categories
The deductions will be applied in different categories according to the NSSF Act.
The Upper Earning Limit (UEL) is applicable to employees earning Sh18,000 and above, while the Lower Earning Limit (LEL) will be applied to those who earn below Sh6,000.
“The pension contribution will be 12 per cent of the pensionable wages made up of two equal portions of 6 per cent from the employee and 6 per cent from the employer subject to an upper limit of Sh2,160 for employees earning above Sh18,000,” reads a public notice on the Act.
Employees earning between Sh3,000 and Sh4,500 will pay Sh360 up from Sh200 while those earning between Sh4,501-6,000 will pay Sh540.
Employees earning between Sh6,001-10,000 will pay Sh720, those earning above Sh10,000 and below Sh14,000 will remit Sh1,200 monthly, while those earning between Sh14,000 and Sh17,999 will contribute Sh1,680.
Labour Court
The government’s plan to implement the NSSF Act 2013 for higher monthly contributions had been cut short by Justices Nduma Nderi, Hellen Wasilwa and Monica Mbaru in September 2022 when they declared the Act illegal and unconstitutional.
The case challenging the law was filed by Kenya Tea Growers Association and 14 other employer and employee associations.
The Employment and Labour Court agreed with their submissions and declared that the NSSF Act 2013 was unconstitutional since it was enacted by the National Assembly without public participation and involvement of the Senate.
But the NSSF Board of Trustees through Senior Counsel Fred Ngatia appealed the decision, arguing that the court lacked jurisdiction to determine the dispute and wrongly found that the National Assembly failed to involve the Senate when the law did not concern county governments.
The Appeal Court judges agreed that enactment of the NSSF Act, 2013 did not require participation of the Senate and that the Labour Court made a grave error by failing to establish that the Act did not interfere with functions of county governments.
“The decision declaring the NSSF Act, 2013 unconstitutional for failure to involve the Senate in its enactment was not supported by the law. On this ground, we hold that the judgment cannot be allowed to stand,” the appellate judges ruled.
