NSSF Orders Employers to Maintain Enhanced Contribution Rates Despite Legal Uncertainty

The National Social Security Fund (NSSF) has issued a public statement clarifying that the NSSF Act 2013 remains fully operational. Managing Trustee David Koross stated that ongoing legal proceedings do not alter the current statutory deduction framework for workers and employers.

The fund instructed employers to continue remitting contributions under the enhanced year four cycle, as outlined in the Third Schedule of the legislation. The directive comes amid public discussion regarding whether the state-backed retirement scheme should revert to its historical baseline deductions.

Prior to the 2013 legislative reforms, monthly contributions were capped at a flat rate of Sh200 from the employee, which was matched by an equivalent Sh200 from the employer. The NSSF Act 2013 shifted deductions toward an earnings-based system.

The fund stated that the legislative framework derives its validity from a Court of Appeal judgement delivered on February 3, 2023. This appellate decision overturned an earlier ruling by the Employment and Labour Relations Court (ELRC), which had found the law unconstitutional.

While separate aspects of the pension implementation remain subject to judicial review, the fund maintained that the active rates are unaffected. The NSSF administration advised stakeholders to ignore opinions suggesting a return to the previous Sh200 statutory limit.

According to the public statement, the fund is awaiting further direction from the Court of Appeal on outstanding matters that are pending determination. The management emphasized that these unresolved legal questions have no bearing on the mandatory remittance schedule.

The agency noted that the 2013 legal framework was designed to address systemic gaps in national retirement planning. Statistics cited by the fund indicate that only 20 percent of Kenyan workers have a formal retirement saving plan.

The lack of robust retirement safety nets has left over 1.2 million elderly citizens facing food insecurity, while an additional 0.8 million older individuals live alone in extreme poverty. The fund argues that historical Sh200 contributions were inadequate to combat old-age poverty.

Data released by the fund indicates that its total portfolio grew to approximately Sh715 billion in unaudited assets by March 30, 2026. This accumulation is intended to improve retirement benefits, closing the historical savings deficit Kenya faced against regional peers.

The retirement scheme declared a net return of 11 percent to its members during the 2023/2024 financial year. The subsequent 2024/2025 financial period saw declared net returns increase to 17 percent, driven by expanding contribution bases.

The Board of Trustees and the management team reaffirmed their commitment to secure sustainable returns, while remaining compliant with statutory provisions and court rulings. Failure by employers to comply with the current rates risks incurring statutory penalties.

The Press Release

The statutory agency reiterated that social security is a fundamental human right under Article 43 of the Constitution of Kenya 2010. The state carries the legislative obligation to progressively realize this right across formal, informal, and self-employed sectors.