The National Social Security Fund (NSSF) said it will challenge the High Court ruling that stopped its bid to increase monthly contributions from the current Sh200.
President William Ruto said he has agreed with the NSSF management and board to go back to the courts and push for increased compulsory monthly contributions towards retirement.
Current contributions
Formal workers contribute Sh200 a month towards NSSF as their retirement.
Employers match the Sh200 contribution with a similar amount meaning that formal workers' monthly savings in NSSF towards retirement amounts to Sh400.
The contribution is compulsory and employers remit it every ninth day of the month.
Late payments of NSSF contributions attract a penalty at the rate of 5 per cent of the total contributions for each month or part of the month that is remitted late.
Formal workers are allowed to voluntarily contribute more than Sh200 but the additional money is not matched by employers.
Informal workers are also allowed to voluntarily sign up and contribute to the NSSF.
Contributions to NSSF are deducted from gross pay before computing taxation.
NSSF had 2.5 million members by end of June 2021.
NSSF received Sh14.7 billion as contributions from members in the financial year ended June 2021.
The monthly contributions were reviewed to Sh200 from Sh160 in 2001.
The proposed NSSF contribution that High court quashed
The proposed contributions to increase contributions are contained in the NSSF Act 2013.
High Court said the Act was not subjected to public participation before passage as required in the constitution.
If allowed, the Act would have seen workers compelled to save more for retirement, with employees also matching it.
Total monthly NSSF contribution would have been Sh2,160 (split equally between employee and employer.
The Sh2,160 is 12 per cent of Sh18,000 which was the proposed maximum pensionable earnings.
The stalled Act wanted to stagger payment over a period of five years.
Top earners were to pay more than Sh10,000 monthly with their employers topping an equivalent amount in the fifth year.
In the first year, top earners were to contribute Sh1,080 while low earners contribute Sh360 and employers match this.
The amount was to rise gradually with that of lower earners crossing Sh500 in the fourth year and that of top earners going above Sh10,800.
