The National Social Security Fund (NSSF) has announced revenues of Ksh105.29 billion on a budget of Ksh78.94 billion. This is a nearly 50 per cent improvement compared to Ksh59.14 billion over the year ending June 2024.
Speaking during a session with the Parliamentary Investment Committee to review the auditor general's report for the 2021/2022 and 2023/2024 fiscal years, senior NSSF officials revealed the profits while defending new allocations.
The surge in revenue comes even as the National Social Security Fund (NSSF) Act, 2013 (the Act), has undergone several amendments in recent years.
Some of the key changes included the introduction of increased contribution rates and the expansion of the contribution base to include workers in the informal sector, as well as the creation of a two-tier system for contributions.
One of the key revenue sources for NSSF is the mandatory monthly contributions from employees and employers. Under the revised model, employers and employees contribute more towards retirement savings, boosting the fund’s collections.
From February 2025, Kenyans earning Ksh80,000 to Ksh500,000 now contribute Ksh4,320, matched equally by employers, bringing the total to Ksh8,640. Those earning Ksh70,000 contribute Ksh4,200, with employers matching the amount. The Tier I deduction remained at Ksh480, while Tier II is Ksh3,840.
The higher deductions have accelerated the growth of the State-backed national pension scheme. The amendments also expanded the tax base to include informal sector workers, ensuring broader coverage.
Despite the impressive revenue figures, concerns have emerged over how NSSF allocates funds. While the surplus signals financial stability, the auditor general’s report highlighted budget anomalies, including misallocated funds worth Ksh177.7 million.
An NSSF official acknowledged these anomalies during the parliamentary meeting, admitting that some payments were not related to asset acquisitions. The official assured lawmakers that moving forward, the fund would seek Treasury approval for reallocation to ensure better financial accountability.
''We wish to state that we acknowledge the anomaly, and going forward, we will be seeking Treasury approval for the reallocation. I think this is an admission on our end that that was an oversight and this was necessitated by the challenges of budget,'' the official assured.
Meanwhile, concerns have been raised following reports that the NSSF funds are being sourced to finance infrastructure development, including toll roads.
While opposing the opinion, former Budget and Appropriations Committee Chair Ndindi Nyoro insisted that workers’ contributions should be optimally invested to secure their future and not used to build roads.
