Central Organisation of Trade Unions (COTU) Secretary General Francis Atwoli has praised the doubling of National Social Security Fund (NSSF) deductions saying in future the funds will be beneficial to Kenyan workers.
In a statement released Tuesday, February 4, Atwoli dismissed the backlash the new NSSF rates have received particularly in the political landscape accusing leaders of misleading the public.
“The Central Organization of Trade Unions (Kenya), COTU (K) has noted with concern the misinformation and political narratives surrounding the continued implementation of the National Social Security Fund (NSSF) Act of 2013. As the voice of Kenyan workers, we affirm that the full implementation of this Act is not only beneficial but necessary for securing workers’ financial futures,” Atwoli stated.
“First and foremost, it is critical to clarify that NSSF is not a tax. NSSF is a structured mandatory savings mechanism aimed at ensuring that workers retire with dignity. Unfortunately, most of those politicizing NSSF enjoy a superior pension or are assured of income streams through the numerous business ventures that they own,” Atwoli added.
The message by Atwoli comes as Kenyans are set to take home lesser pay following government's directive to increase NSSF monthly contribution to Ksh4320 from Ksh2160.
The new statutory deductions, which are set to take effect in February this year, are part of the NSSF Act of 2013 that is currently being implemented in phases. Employed Kenyans will be deducted 6 per cent of their salaries.
According to the Act, the lower earnings limit or the amount that is considered the lowest pensionable salary has been raised to Sh9,000 up from the current Sh7,000 while the upper earnings limit has been raised to Ksh29,000 with this category of employees set to contribute more money.
While remitting the funds, the employer would be required to match the salaries of the employee with the deduction, simply, it means the deductions would be based on the amount an individual earns.
Despite becoming law in 2013, the Act was implemented in 2023 after a decade-long court battle that sought to scrap the Act. However, in 2022, the Court of Appeal granted the government leeway to implement the Act.
Atwoli expressed the importance of social security as a fundamental human right citing the International Labour Organisation Convention No.102 (1952) that established minimum global standards for social security. Further the long-serving COTU boss noted the Kenyan Constitution’s guidelines where Article 43 guarantees every citizen the right to pension and social security.
“As COTU (K), we hold the view that if anyone genuinely care about workers, they should fully support NSSF in its mission to eliminate old-age poverty by ensuring that every Kenyan saves for retirement. A well-structured pension system provides both a lump sum payout and a monthly pension, enabling retirees to maintain a decent standard of living,” Atwoli noted.
Further, Atwoli noted Kenya’s position in relation to her East African counterparts in social security contributions with Kenya lagging behind.
“While the NSSF rates in Kenya are set at 12 per cent (6 per cent from the employer and 6 per cent from the employee), Uganda mandates 15 per cent (10 per cent employer, 5 per cent employee), and Tanzania has a much higher contribution rate of 20 per cent (10 per cent employer, 10 per cent employee),” Atwoli averred.
The tough-talking COTU boss called upon Kenyan workers to treat with “utmost contempt anyone talking ill about their retirement plan and anyone opposed to the full implementation of the NSSF Act (2013),”.
The furore surrounding the increased contributions towards NSSF came at a time where the government implemented several tax measures that are set to impact the payslips of Kenyans even further.
The Tax Procedures (Amendment) Bill, the Tax Laws (Amendment) Bill and the Business Laws (Amendment) Bill were introduced by the National Treasury as it sought to bridge the budget deficit occasioned by the withdrawal of the highly contested Finance Bill 2024.
