Kenya – 2023 National Social Security Fund Changes.

Effective from 3 February 2023, the Kenyan Government has declared the NSSF Act No. 45 of 2013 as constitutional.

The NSSF Act No. 45 of 2013 was passed into law on 24 December 2013. However, several petitions were filed by labour organizations against the Act, and it was suspended by a court order in 2014. The Act was then declared unconstitutional by the Employment and Labor Relations Court (ELRC) on 19 September 2022, prior to being brought before the Court of Appeal by the NSSF Board of Trustees where the ELRC’s judgement was set aside, and the Act was consequently declared as constitutional.

Under the appeal, an employee and an employer will each contribute 6% of pensionable earnings to the fund, categorized as follows:

• Tier 1: 6% of pensionable earnings, up to the Lower Earning Limit of Kshs 6 000.00 (contribution limited to Kshs 360 per month)
• Tier 2: 6% of pensionable earnings, up to the Lower Earning Limit of Kshs 12 000.00 (contribution limited to Kshs 720 per month)

The total contributions for both employee and employer are Kshs 2 160.00 per month.

Self-employed individuals who are members of the fund may proceed contributing the flat rate of Kshs. 200.00 per month, which is the minimum amount of voluntary contribution to the Fund.

The effect of this appeal is that all employers are to commence complying with the regulations of the NSSF Act immediately.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change