Employers want the proposed increase in the National Social Security Fund (NSSF) contributions spread over five-years, even as they call for more consultation.
The Federation of Kenya Employers (FKE) says this will enable employers and employees adjust to accommodate the new rates, further adding that it should be effected based on “statutory minimums.”
In this case, it referees to the minimum wage permitted by law, currently at Sh15,120.
This comes as the government continues to push for an increase on the monthly contributions through the NSSF Act. It seeks to raise this from the Sh200 flat rate to six per cent of an employees earnings, with the employer matching the same.
The High Court in September stopped the move saying it was not subjected to public participation in breach of the Constitution— which demands community input on major decisions.
“The recent decision by the Court gives all stakeholders the opportunity to go back to the drawing board by holding consultative engagements to reach win-win proposals,” national president Habil Olaka said.
The government has appealed the court decision with President William Ruto keen to change what he terms a “poor saving culture.”
While FKE says it supports the planned increase, it said the government should not rush it without addressing public concerns.
The NSSF issue has been in court since 2014 as stakeholders in social security matters raised issues on how the NSSF Act 2013 will be implemented.
The higher pension contributions, according to the State, will help NSSF build a bigger retirement fund, which will see retirees earn more in monthly stipends, as opposed to the current one-off payment.
The government is also keen to increase contributions to the National Hospital Insurance Fund (NHIF)
However employers argue that the NHIF Act gives “absolute powers” to the NHIF board to review rates every two years, without the involvement of stakeholders
It is also not clear what NHIF will cover and there is a lack of public participation and transparency, employers have argued.
He said there is need to develop innovative models of financing the initiatives without hurting the workers and enterprises.
The contributions were last reviewed in 2001 when the rate was increased from Sh160 to Sh200.
The NSSF Act 2013 seeks to raise this amount which will see monthly contributions increase to above Sh2,000.
