Treasury now mulls review of NSSF Act to ease workers' burden

The government is mulling the revision of the National Social Security Fund (NSSF) Act 2013, given some challenges it poses as raised by the private sector. National Treasury and Economic Planning Cabinet Secretary John Mbadi confirmed this plan, stating that the government is committed to offering a level playing field to all players in the sector. CS Mbadi, who was the chief guest at the event did not however specify if the outcome may offer relief to formally employed Kenyans who are yet to come to terms with the recent deduction of the Social Health Insurance Fund that took effect on October 1, 2024, squeezing 2.75 per cent of their gross pay. "Our endeavour is to create a level playing field in which small and large pension players thrive. In doing so, we need to work together to resolve outstanding industry issues including bottlenecks in the implementation of the NSSF Act of 2013," said the CS. This revelation comes as contributions to NSSF are expected to be enhanced next year in line with President William Ruto's plan to improve the country's saving culture. The enhancement however has made the private pension funds jittery as some employers are re-considering the need for signing up to individual schemes. CPF Group Chief Executive Hosea Kili detailed this challenge yesterday at the launch of the firm's new product, Taifa Pension Fund, saying many employers are abandoning their superior schemes due to the much NSSF is taking. Dr Kili said some employers previously contributed as much as 25 per cent combined employer and employee to their retirement schemes, offering their employees meaningful retirement security. "However, with the introduction of a mandated 12 per cent contribution to NSSF, many employers are being forced to abandon these superior schemes in favour of compliance," he said. He said the high NSSF contributions rates make it financially unfeasible for employers and employees to maintain both NSSF and their existing schemes. "This law, which was intended to expand coverage, is inadvertently dismantling more generous pension plans and undermining many employers' investments in the over 1,300 schemes registered by the Retirements Benefits Authority (RBA)," he said. The taking effect of the NSSF Act 2013 brought in Tier I and Tier II model of contribution to the national pension fund. This model saw employees' payslips being slashed from the previous Sh200 to Sh1,080. It is expected to see more deductions progressively to Sh6,480 by 2026. Jubilee Holdings Group chief executive Dr Julius Kipngetich, while lauding this product, called for the financial services sector to move away from government paper even as players push for increased coverage.

Treasury now mulls review of NSSF Act to ease workers' burden

Get Full Access for Ksh299/Week.

Related Topics

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS

DIGGER JOBS

Digger Motors

Digger Real Estate

Treasury now mulls review of NSSF Act to ease workers' burden

Get Full Access for Ksh299/Week.

Related Topics

Popular this week

Latest Stories

The Standard Insider

Digger Classified

GET OUR NEWSLETTER

CONNECT WITH US

FOR THE LATEST JOB ADVERTS