Kenyans are set to feel the pinch of increased NSSF deductions after the Court of Appeal allowed the government to implement a new law that raised the contribution tenfold.
Appeal Court judges Hannah Okwengu, Mohamed Warsame and John Mativo ruled that the National Social Security Fund (NSSF) Act of 2013, which sought to increase monthly contributions from KES 200 to KES 2,000, is legal and nothing stops the government from implementing it.
“We find that the Employment and Labour Relations Court (ELRC) made a mistake in declaring the Act unconstitutional when it had no jurisdiction to question validity of the law as that was a preserve of the High Court,” ruled the judges
In September 2022, the Labour and Employment Relations Court declared the bid unconstitutional, null and void, saying the NSSF Act, 2013, was in breach of the Constitution as there was no public participation ahead of its enactment.
The ruling comes after President William Ruto publicly declared that the amount should be increased to enable Kenyan employees to save a reasonable amount.
“Majority of people on the roll of NSSF are paying KES 200, it is ridiculous We just got a ruling from the court a week ago that it is wrong for us to increase it from KES 200, I don’t know really know what we are doing. Do we live in the same country?” President Ruto
Ruto said that he had agreed with NSSF to talk to the court and reconsider the ruling.
“We cannot continue to borrow from the savings of others. We need to build our country with our savings. Let us borrow from our savings so that we can give interest to our lenders,” Ruto said.
In November 2022, the Federation of Kenya Employers said the proposed increase in the NSSF contributions should be spread over five years.
FKE said this will enable employers and employees to adjust to accommodate the new rates, further adding that it should be effected based on “statutory minimums.”
The issue has been in court since 2014 as stakeholders in social security matters raised issues on how the NSSF Act 2013 will be implemented.
Read also; World Bank Backs NSSF’s Bid to Increase Monthly Contributions to KES 2,068.
