Kenya Orient Life Assurance Limited has received approval by the Retirement Benefits Authority (RBA) to manage NSSF tier II contributions. It joins a list of others who have received similar clearance from the Authority, including Minet Kenya, Zimele, Britam and Enwealth.
Kenya has reviewed the NSSF Act
The NSSF Act No. 45 of 2013 allows Tier I contributions from both the employee and the employer capped at KSh. 720 go to NSSF while the rest of the contributions above KSh 720 up to a maximum of KSh 1,440 categorised as Tier II are now being managed by authorized private schemes. Both Tier I and Tier II contributions are mandatory.
Contributors to NSSF, who have been dismal returns from the fund for years, after putting in all their life savings, now look forward to better benefits.
According to the NSSF Act 2013, mandatory contributions are a total of 12% of a person’s earnings divided into Employer contributions of 6% and Employee contributions of 6%
The entry of more private pension schemes into NSSF monies comes at when the Kenya Government is keen to double the Fund’s savings within the next four years from the current KSh 350 billion.
Following an amendment to the NSSF Law, employees who were parting with Ksh.200 every month as statutory deductions, will pay more with their employers matching the same.
For instance, those earning less than KSh15,000 every month are now parting with KSh.350; those earning above the said amount are deducted KSh.900 per month, while those with a monthly income of KSh. 18,000 and above are deducted KSh 1,080, an amount their employers match.
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