The law through which the monthly contributions to the National Social Security Fund (NSFF) was increased from Sh200 to Sh2,068 is unconstitutional, court rules.
Three judges, Mathews Nduma, Hellen Wasilwa and Monica Mbaru, sitting in Nairobi, invalidated the NSSF Act of 2013, on grounds that it was not subjected to public participation as required by the Constitution. The NSSF Act 2013 sought to raise monthly contributions by employees ten-fold.
Furthermore, the three judges argued that the Act was unconstitutional since its promoters did not get approval from the Senate despite the law affecting county employees and finances of the devolved governments.
“An order is issued prohibiting the government from compelling or requiring mandatory registration, enrolment or listing of any employer or employee whether registered as a member or any retirement benefits scheme or not ….to register, enroll or list and contribute their earnings or any party,” the judges said.
“Since the NSSF Act 2013 was not presented to the Senate for enactment as a money bill, the Act is declared unconstitutional, null and void.”
Instructively, in the quashed Act, total pension contribution for both the worker and employee was supposed to be a maximum of Sh4,136, which 12 per cent of the proposed maximum pensionable earnings of Sh34,476.
The NSSF argues that the country’s dependency ratio is too high, and that higher savings will help people retire in dignity. Established in 1965 through an Act of Parliament Cap 258 of the Laws of Kenya, NSSF initially operated as a Department of the Ministry of Labour until 1987 when the NSSF Act was amended, effectively transforming the Fund into a State Corporation under the Management of a Board of Trustees.
The organization was designed to offer social protection to workers by providing social security protection to workers in the formal and informal sectors. However, it has be ridden with sleaze over the years making it unable to achieve its mission.
