Francis Atwoli, the Secretary General of the Central Organisation of Trade Unions (COTU), commended the decision to double National Social Security Fund (NSSF) deductions, stating that these funds will prove advantageous for Kenyan workers in the future.
In a statement issued on Tuesday, February 4, Atwoli dismissed the criticism of the new NSSF rates, especially from political figures, accusing them of misleading the public.
“COTU (K), the Central Organization of Trade Unions (Kenya), has expressed concern over the political narratives and misinformation regarding the ongoing implementation of the 2013 National Social Security Fund (NSSF) Act. Atwoli stated, “We affirm as the voice of Kenyan workers that fully implementing this Act is necessary and advantageous for securing the financial futures of workers.”
“To begin with, it is essential to explain that the NSSF is not a tax. NSSF is a systematic compulsory savings mechanism designed to guarantee that employees can retire with dignity. Atwoli added, “Regrettably, many of those who are making politics out of the NSSF benefit from a pension that is better than average or have guaranteed income through their various business interests.”
Atwoli’s message comes as Kenyans are preparing to receive reduced pay due to the government’s directive that raises the NSSF monthly contribution from Ksh2160 to Ksh4320.
The new mandatory deductions, scheduled to come into effect in February this year, are included in the NSSF Act of 2013, which is currently being rolled out in stages. Kenyans who are employed will have 6 percent of their salaries deducted.
The Act stipulates that the lower earnings limit, defined as the minimum pensionable salary, has been increased to Sh9,000 from the current Sh7,000. Additionally, the upper earnings limit has been raised to Ksh29,000, resulting in higher contributions from this group of employees.
In the process of transferring the funds, the employer would need to align the employee’s salaries with the deductions; this implies that the deductions would be calculated based on each person’s earnings.
The Act, which became law in 2013, was implemented in 2023 following a decade-long court battle aimed at scrapping it. In 2022, though, the Court of Appeal allowed the government some leeway to put the Act into effect.
Atwoli emphasized that social security is a fundamental human right, referencing the International Labour Organisation Convention No. 102 (1952), which set minimum global standards for social security. Additionally, the COTU leader, who has held his position for many years, pointed out that Article 43 of the Kenyan Constitution guarantees all citizens the right to pension and social security.
“We at COTU (K) believe that those who truly care about workers should wholeheartedly back the NSSF in its goal of eradicating old-age poverty by guaranteeing that all Kenyans save for their retirement. Atwoli noted that a well-structured pension system offers both a lump sum payout and a monthly pension, allowing retirees to uphold a decent standard of living.
Additionally, Atwoli pointed out that Kenya is trailing behind her East African counterparts regarding social security contributions.
“In Kenya, the NSSF contribution rates are established at 12 percent (comprising 6 percent from employers and 6 percent from employees), while Uganda requires a rate of 15 percent (10 percent from employers and 5 percent from employees) and Tanzania has an even higher rate of 20 percent (with both employers and employees contributing 10 percent each),” Atwoli stated.
The COTU leader, known for his hard-line rhetoric, urged Kenyan workers to regard with “utmost contempt anyone who speaks negatively about their retirement plan and anyone who is against the complete enforcement of the NSSF Act (2013).”
The uproar over the rise in NSSF contributions coincided with the government’s introduction of various tax measures that will further affect Kenyans’ payslips.
The National Treasury introduced the Tax Procedures (Amendment) Bill, the Tax Laws (Amendment) Bill, and the Business Laws (Amendment) Bill in an effort to address the budget deficit caused by the withdrawal of the highly contested Finance Bill 2024.
