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The Supreme Court has certified as urgent a petition seeking to stop the government from enhancing National Social Security Fund (NSSF) contributions.

The apex court Registrar, Bernard Kasavuli, yesterday granted the NSSF Board of Trustees, Retirement Benefits Authority, Federation of Kenya Employees (FKE), the Attorney General and other parties in the lawsuit lodged by 6,000 pensioners, seven days to  file their responses.

Kasavuli further directed the petitioners — who appealed a decision by the Court of Appeal that paved the way for the increase of NSSF contributions by the government — to file their further affidavits and submission within three days.

The registrar ordered that the case be mentioned on March 6 to confirm compliance on filling of responses and allocation of the matter to the judge appointed by either the Chief Justice or her deputy.

File pleadings

The court granted the government seven days — after NSSF through lawyer Fred Ngatia and State counsel Mnene Eredi sought this period of time — to file their pleadings before the case can be fixed for hearing. “Mention will be on the tenth day, March 6, 2023 at 9am, to confirm compliance,” Kasavuli stated.

The directions come after 6,000 petitions, through the County Pensioners Association, last Friday sought orders from the top court suspending the implementation of the Appellate Court’s ruling that paved the way for increase in NSSF dues.

Through lawyer Muthomi Thankolu, the petitioners want the apex court to set aside the appellant court’s decision dated February 3, 2023, and declare mandatory contributions to NSSF unconstitutional.

Further, they want the Supreme Court to  issue orders barring the NSSF Board of Trustees, Retirement Benefits Authority and Federation of Kenya Employees (FKE)  from increasing workers’ monthly deductions, set to kick off from March 9, 2023, pending the hearing of  the case.

“The public will suffer substantial and  irreparable harm (including but not limited to a run on pension schemes superior to the NSSF) unless this court stops the implementation of the impugned Act, pending the hearing and determination of this appeal,” lawyer Muthomi argues.

They challenge the decision on grounds that the Court of Appeal, in its decision, misinterpreted and misapplied various provisions of the Constitution when it allowed a ten-fold increase to Sh2,068 in workers’ monthly contributions.

Monopoly threat

 “We seek the court to suspend the impugned implementation of the Court of Appeal’s decision as there is serious threat of monopoly and emasculation that the impugned Act (especially sections 18, 19, 20 and 71) poses to the entire pensions industry — specifically, the threat of mass transfers of employees from superior pension schemes to NSSF,” the County Pensioners Association  states.

It is the County Pensioners Association’s argument that the conservatory orders they seek will not cause any harm, damage or prejudice to the government, as implementation of the impugned NSSF Act during the pendency of their appeal would aggravate the denial/miscarriage of justice already occasioned on them.

The disputed decision by Justices Hannah Okwengu, Mohamed Warsame and John Mativo approved the NSSF Act of 2013, saying it was subjected to public participation as required by the Constitution.

 This was after the bench of three judges overturned a judgment delivered last September by the Employment and Labour Relations Court, which found that the NSSF Act 2013 was unconstitutional; and blocked the government’s bid to increase workers’ monthly deductions.

Under the Act, the NSSF sought to build a bigger retirement pot and offer workers monthly stipends after their retirement, as opposed to the current one-off payment.

The contributions were last reviewed in 2001 when the rate was increased to Sh200 from Sh160. The NSSF had 348,291 registered members as of June 2021, with an investment portfolio of Sh284.9 billion. It beat inflation last year when savings increased by 10 percent.

The Appellate Court bench  ruled that the Labour Court wrongly assumed jurisdiction in a matter that should have been handled by the High Court.

Unconstitutional law

The case was first filed by the Kenya Tea Growers Association and the Agricultural Employers’ Association, who moved to the Labour Court to stop the proposed increase, arguing that the law supporting the increment was unconstitutional. Justices Mathews Nduma, Hellen Wasilwa and Monica Mbaru, in a ruling delivered last year, quashed the NSSF Act of 2013.

 If the Supreme Court does not issue orders suspending the planned implementation of the NSSF Act, top earners from March 9 will be deducted up to Sh1,080 — from the current Sh200. This amount could be increased further in the next five years.