We support enhancement of NSSF contribution but we should have dialogue on better ways to implement it


Nairobi, Kenya, Nov 25 – Federation of Kenya Employers (FKE) now says that it supports government’s plan to increase the National Social Security Fund (NSSF) contribution but advised the state to engage other stakeholders on the best ways to implement it.

“We take note of the Government’s agenda to establish a universal social protection system that encompasses Universal Health Coverage (UHC), and Universal Social Security Coverage (pension, occupational hazard, and unemployment insurance). This is a noble goal that we employers support,” FKE president Habil Olaka said Friday.

However, Olaka pointed out that the challenge lies in building a viable funding mechanism that is not damaging to the competitiveness of the labor market.

He added that the financing requires a shared approach where no party is overburdened.

“It is not practical to expect the formal employers and workers to bear the burden of Universal Social Protection System, as only 15% of the country’s wage employment is in the formal sector,” he said.

He added that the financing of NSSF, NHIF (National Health Insurance Fund), and Affordable Housing Scheme should be live to this reality.

“FKE supports the enhancement of NSSF contribution to secure Kenyans in old age. However, employers pointed out issues with the now nullified NSSF Act 2013 that needed to be addressed for the new rates to be implemented,” he added

The FKE President stated that the recent decision by the Court now gives all stakeholders the opportunity to go back to the drawing board by holding consultative engagements to reach win-win proposals.

He added he looks forward to engaging with the Government and other stakeholders to develop innovative models of financing these initiatives without hurting workers and enterprises.

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Two months ago, President William Ruto reaffirmed his government’s resolve to re-engineer the country’s saving scheme to bridge the investment-savings deficit.

Ruto said that the current social security infrastructure in the country including the NSSF and private saving schemes only cater to people in formal employment leaving out a bulk of Kenyans in the informal sector.

“There is no retired Kenyan today who is living on their NSSF retirement benefits. The meager current contribution of Sh200 a month adds up to Sh72,000 over 30 years. There is no rate of return on earth that can grow this into an adequate pension,” Ruto said when he made his first official statement to a joint sitting of parliament.

“We just have to be honest with ourselves. You cannot pretend you are saving by saving Sh200 bob and it happens across board,” he added.

The Head of State said his administration intends to overhaul the social security infrastructure in the country to make it more inclusive.

To encourage those excluded to save, Ruto said that he will be proposing a national savings drive to encourage those in the informal sector to set up their retirement savings plan.

“For every Sh2 saved in the scheme up to a maximum of Sh6,000 per year, the government will contribute a shilling for every Sh2 saved. Meaning every Kenyan who will save Sh6,000 a year, the government will give them Sh3,000 per year,” he said.




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