The National Social Security Fund (NSSF) is poised to implement a significant rise in employee contributions following ongoing negotiations with labor unions and employers. Chairman Gen. (Rtd) Julius Karangi revealed discussions with the Central Organisation of Trade Unions (Cotu) and Federation of Kenyan Employers (FKE) could finalize the full implementation of the NSSF Act, 2013 within one to two months.
The 2013 legislation mandates employers and employees each contribute 6% of pensionable earnings, doubling the previous flat rate of Sh200. This shift, which triggered legal challenges in 2014, aims to increase monthly contributions to Sh720 over five years while transitioning the fund to a pure pension model.
"We are working with stakeholders to unlock the Act's benefits for retirees," Karangi stated during the launch of a Safaricom partnership enabling M-Pesa contributions. The collaboration addresses NSSF's 2.7 million member base—far below the 12 million active workers—by streamlining payment processes.
The fund faces scrutiny over its Sh196 billion assets, with auditor Edward Ouko highlighting Sh1.7 billion in questionable investments, including Sh900 million lost in collapsed banks. Despite these challenges, Karangi emphasized the M-Pesa initiative would reduce transaction costs for members.
Safaricom's Rita Okuthe noted the platform's convenience, stating it would "save members time and money." The reforms come as employers grapple with additional pressures, including a contested housing levy.
