The Central Organization of Trade Unions (COTU-K) has defended the continued implementation of the National Social Security Fund (NSSF) Act of 2013, dismissing claims that it is an unnecessary financial burden on workers.
In a statement on Tuesday, February 4, COTU explained that the Act is crucial in ensuring that Kenyan workers retire with dignity and financial security.
"COTU has noted with concern the misinformation and political narratives surrounding the continued implementation of the National Social Security Fund (NSSF) Act of 2013. As the voice of Kenyan workers, we affirm that the full implementation of this Act is not only beneficial but necessary for securing workers' financial futures," the statement read.
COTU expressed concern over misinformation surrounding the NSSF, warning that attempts to politicize or misrepresent the revised contribution rates are misleading workers and jeopardizing their long-term financial stability.
"First and foremost, it is critical to clarify that NSSF is not a tax. NSSF is a structured mandatory savings mechanism aimed at ensuring that workers retire with dignity. Unfortunately, most of those politicizing NSSF enjoy a superior pension or are assured of income streams through the numerous business ventures that they own.
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"As such, any attempts to politicize or misrepresent the revised NSSF contribution rates, which were legally enacted in 2013, only serve to mislead the public, hinder compliance, and jeopardize workers' long-term financial security," the statement added.
COTU also emphasized that social security is a fundamental human right, citing international labor standards and Kenya’s constitutional provisions.
As such, it called on the government and employers to uphold and enhance social security measures rather than undermine them.
"It is important to note that Social Security is a fundamental human right. It exists to protect individuals against life’s uncertainties, including old-age poverty. The International Labour Organization (ILO) Convention No. 102 (1952) establishes minimum global standards for social security, while Kenya’s Constitution (2010), under Article 43, explicitly guarantees every citizen the right to pension and social security. It is, therefore, the duty of the government, employers, and all players to uphold and enhance social security measures, including strengthening NSSF," the statement further read.
COTU urged workers to ignore those opposing the full implementation of the NSSF Act, stating that such opposition does not serve the interests of workers but rather those who already have secure financial futures.
"As COTU (K), we hold the view that if anyone genuinely cares about workers, they should fully support NSSF in its mission to eliminate old-age poverty by ensuring that every Kenyan saves for retirement. A well-structured pension system provides both a lump sum payout and a monthly pension, enabling retirees to maintain a decent standard of living," the statement stated.
Starting in February 2024, NSSF will implement revised contribution rates affecting both employees and employers, as outlined in the NSSF Act of 2013.
For example, the Lower Earnings Limit, also known as Tier I, will be increased from Ksh 6,000 to Ksh 7,000.
Employees will now contribute 6% of this new limit, which amounts to Ksh 420, while employers will also contribute Ksh 420, bringing the total monthly contribution to Ksh 840.
For the Upper Earnings Limit, referred to as Tier II, the previous cap of Ksh 18,000 will be raised to Ksh 36,000.
Employees earning above Ksh 7,000 will contribute 6% of the difference between Ksh 36,000 and Ksh 7,000, which results in a deduction of Ksh 1,740.
Employers will match this amount, leading to a combined monthly contribution of Ksh 3,480.
Employers are required to match each employee's contribution, effectively doubling the total amount remitted to the NSSF.
