The National Social Security Fund (NSSF) has announced that workers in the informal sector are a way of improving social security coverage and ensure broader financial inclusion.
According to the Fund, the move is part of the several new initiatives designed to benefit workers across various sectors of the economy.
By bringing more individuals into the system, NSSF hopes to expand its base, increase transparency, and promote financial literacy among contributors.
“The NSSF is committed to increasing its presence in the informal sector by recruiting more members to the fund to rebrand and make the fund more accessible to workers across all sectors of the economy,” read the statement in part.
“The informal sector, which has traditionally been underrepresented in social security schemes, will be targeted through outreach programs aimed at educating workers on the importance of saving for retirement.
Employees in Informal Sector to Pay Monthly Deductions
As part of a pilot program, the NSSF is set to roll out mobile-based enrollment systems to enable individuals in remote and underserved areas to register and contribute with ease.
Additionally, the Fund has embarked on automating its processes to enhance contributions and improve efficiency in managing members’ funds.
By leveraging technology, the NSSF aims to bridge the coverage gap that has excluded millions of informal workers from accessing social security benefits.
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Automation of NSSF Services
As part of its modernization efforts, the Fund is also developing advanced digital platforms to streamline contributions and claims, reduce administrative costs, and boost operational efficiency.
In addition to faster processing times, NSSF intends to boost the returns on members contributions by generating innovative and competitive opportunities.
Deputy Chief of Staff in charge of delivery management, Eliud Owalo, said NSSF had committed to turn around its operations in the fiscal year 2023/2024 by way of reducing time taken in processing members benefits, ensuring that retirees receive their funds more quickly.
Owalo added that the government is committed to enhancing performance contracting and delivery by rewarding and recognizing well performing Ministries, Departments and Agencies (MDAs), underscoring the importance of meeting the set targets.
Meanwhile, the payslips of salaried Kenyans are set to shrink as new rates for contributions to social security take effect next month.
NSSF deductions are set to double from February 1, as the fund implements adjustments to both employer and employee contributions.
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What Salaried Kenyans Will Contribute in New NSSF Rates
Under the new framework, NSSF contributions will increase to six per cent of an employee’s salary, with employers matching the same amount.
The minimum contributions will rise from Ksh 420 to Ksh 480, while high-income earners will contribute as much as Ksh 4,320, up from the current Ksh 2,160.
The upper income limit will increase from Ksh 36,000 to Ksh 72,000, while the lower limit will be adjusted from Ksh 7,000 to Ksh 8,000.
Employees earning Ksh 72,000 and above will feel the greatest impact of the adjustments, as their contributions will rise to Ksh 4,320 from the current Ksh 2,160.
According to the rates set in the NSSF Act, 2013, Kenyans earning Ksh 50,000 monthly will contribute Ksh 480 for the first tier and Ksh 2,520 for the second tier.
This will push their total deductions to Ksh 3,000, up from the current Ksh 2,160.
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