The World Bank has backed Kenya’s efforts to increase NSSF contributions by workers from the current KES 200 per month to six per cent of monthly pay.
This is a boost to the Kenya Kwanza administration’s push for enhanced pension savings with employees’ monthly contribution to NSSF expected to rise ten-fold to KES 2,068, with employers expected to match this amount.
In its 16th Kenya Economic Update, the World Bank noted that enhanced social protection will have a meaningful role in the country’s inclusive growth if, among other policy changes, the NSSF Act is amended to allow for higher contributions to the scheme by workers.
The World Bank further wants the Retirement Benefits Authority (RBA), the regulator, to enforce stricter regulations of administrative costs incurred by NSSF even as the provident fund invests in better business processes to address operational shortcomings.
President Ruto wants all workers to contribute more to the NSSF, both as a way of securing themselves during retirement and also to increase domestic savings thus shoring up investments.
In September this year, the High Court quashed the bid to increase monthly contributions to the National Social Security Fund (NSFF) ten-fold up to KES 2,068 after it ruled that the law supporting the increments was unconstitutional.
The contributions were last reviewed in 2001 when the rate was increased to KES 200 from KES 160.
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