Why NSSF Will Not Deduct From Your Monthly Salary

The National Social Security Fund (NSSF) was on Thursday, September 22 barred by the Employment and Labour Relations Court from enforcing one of its monopolies on the Kenyan working class.

The court barred NSSF from making mandatory deductions from workers' salaries, deeming the move unconstitutional.

The court argued that it was in violation of the labour rights and insisted that workers should have a right to choose a pension scheme without worrying about contributions to NSSF.

A woman working in an office. /CLASSIC 105

NSSF deducts Ksh200 monthly from workers across the country, which it saves as part of their retirement benefits.

"Sections 20 of the NSSF Act No.45 of 2013 which makes it mandatory to register and contribute to the fund and oblige the petitioner's members (and other employees who have an adequate alternative pension or social security schemes) to join the pension or social security schemes operated by the 1st Respondent violates rights of employees and employers' free choice contrary to Article 49 of the Constitution and is hereby declared null and void," the court verdict read in part.

"An order of injunction is hereby issued prohibiting and restraining the respondents by themselves, their servants, agents, assigns or any person claiming through them or otherwise from demanding, compelling and or requiring mandatory registration, enrolment or listing of any employer or employee whether registered as a member of any retirement benefits scheme or not to register, enrol or list and contribute their earnings or any part thereof in terms of the NSSF Act No.45 of 2013," it added.

Further, the Employment and Labour Relations Court found that sections of the law that gave NSSF a monopoly in the market were illegal. 

The directive was aiming to grant both workers and employees free will to register for the retirement saving scheme of their choice.

Following the ruling that trimmed its mandate, the social security fund maintained that it was established in line with labour laws and thus vowed to challenge the ruling at the Court of Appeal.

President William Ruto had hinted at reforming the sector to allow workers to increase their contributions, saying that the country's social security scheme was falling behind.

"Today you will not believe that we are among the least pensions scheme on the continent. When you look at Tanzania, they have a better pensions scheme yet we have a better economy and likewise Uganda too," he stated during a meeting with Kenya Kwanza leaders in Naivasha.

"We have to rejig and see the way forward, the people from our professionals will be here tomorrow with those from NSSF to take us through what we have to do."

A directive that would have seen the increase of monthly contributions to Ksh2,068 to help NSSF build a bigger retirement pool was thrown out by the High Court.

President William Ruto arrives at Naivasha County for the Kenya Kwanza Parliamentary Group meeting. /WILLIAM RUTO