The National Social Security Fund (NSSF) is a public service organisation in Kenya that provides social protection and financial security benefits to workers.
The NSSF was established in 1965 by an Act of Parliament and was originally a Provident Fund that paid out benefits as a lump sum. In 2013, the NSSF Act was amended to transform it into a Pension Scheme that offers benefits such as:
- Retirement benefits: A monthly life pension upon retirement
- Survivor benefits: Basic assistance to dependents in the event of death
- Invalidity benefits: Basic compensation in the event of permanent disability
Payment of the NSSF contributions by employers
The Contributions are categorised into two; Tier I and Tier II. Tier I contributions are based on pensionable earnings up to the Lower Earning Limit (LEL) whereas Tier II contributions are based on the difference between the Upper Earning Limit (UEL) and the LEL.
The Kenyan government made several changes to National Social Security Fund (NSSF) rates in February 2024, including:
- Lower earnings limit: Increased from KES 6,000 to KES 7,000
- Upper earnings limit: Increased from KES 18,000 to KES 36,000
- Monthly contribution: Increased by 6% per employee
- Employer matching: Employers must match employee contributions of at least KES 200
- NSSF deductions: Deductions on pay above KES 36,000 will double.
The new rates are based on a tiered system, with the percentage contributed depending on the employee’s monthly salary:
Tier 1: Applies to pensionable earnings up to KES 7,000, with both the employee and employer contributing 6% each for a total of 12%. The maximum monthly remittance per employee is KES 2,160 (KES 1,080 employee + KES 1,080 employer) when the employee’s salary exceeds KES 18,000.
Tier 2: Applies to pensionable earnings above KES 7,000, up to KES 36,000, with both the employee and employer again contributing 6% each for a total of 12%.
The new NSSF rates are effective 1 February 2024:
Remittances to the Fund should be made by the 9th day of each subsequent month.
– By Ann Precious Kinyua
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