Atwoli welcomes implementation of new NSSF monthly employee rates

Days after the National Social Security Fund (NSSF) Board of Trustees directed all employers to comply with the NSSF Act No. 45 of 2013, trade unionist Francis Atwoli has welcomed implementation of the rates saying they will cushion Kenyans upon retirement.

The Secretary General of Central Organization of Trade Unions (COTU) defended the new development insisting that upward revision of  the rates would be beneficial to Kenyans in the long run.

The Kenya Kwanza government seeks to increase the monthly remittance from Sh200 to Sh2,160 for employees earning above Sh18,000.

“Consequently, the move to effectively implement the NSSF Act, 2013 is welcome considering it makes it mandatory for employers to ensure that workers have a provident fund and pension scheme,” Atwoli stated.

 The decision was made following a ruling by the Court of Appeal that upheld the Act as legal, allowing the government to move forward with its implementation.

The COTU boss says social security is a human right that focuses on addressing the universal need for protection against certain life risks and social needs.

According to him, many workers have been contributing to and receiving funds from the provident fund which is a lump sum payment for Tier 1, leaving them exposed to old age poverty with no social security covering them.

Going forward, Kenyan workers will be contributing to and receiving funds from the pension fund under NSSF which is a combination of both Provident Fund Tier 1 and the Pension Fund Tier II.

“Noteworthy, the NSSF Act provides that an employer may opt out of Tier II, as provided by the NSSF, for a better scheme. This means that over and above the lump sum payment received at a go, upon retirement or as provided by the NSSF Act, 2013, Kenyan workers will be entitled to monthly benefits, upon retirement, as they would have respectively contributed under the Tier II,” said Atwoli.

 While urging NSSF board of trustees to appoint a competent board that will fight corruption, Atwoli cleared the air that the NSSF deductions are not a form of tax but a fund that employees will have access to upon retirement or as provided for by the NSSF Act, 2013. The development happened after years of sharp opposition by stakeholders such as the Federation of Kenya Employers (FKE) which has been hesitant on the implementation process and time.