In the government's endeavour to secure it's citizens retirement in their sunset days, it rolled out a more vibrant pension scheme with its main target being the employed. The new revamped contribution scheme increased the contributions from the then 200 matched with an equal amount with the employer to the current phase of Tiers. The initial implementation was scheduled to be in July of 2014. However, after protracted court battles the implementation was suspended and only became fully operational in February 2023.
The implementation was segmented to be phased in stages with the first year being capped at Tier I between Kenya shillings one to six thousand while Tier II at between Kenya shillings six thousand and one to eighteen thousand. The deductions are at six percent with a maximum deduction of Kenya shillings one thousand and eighty matched with an equal contribution by the employer.
The second phase will run from February 2024. This introduced some changes with Tier I terminating at seven thousand instead of six thousand as with the previous case and with with Tier II running from between Kenya shiilings seven thousand and one to thirty six thousand. This brought the maximum contribution by an employee who is earning above Kenya shillings thirty six thousand to two thousand one hundred and sixty matched with an equal contribution from the employer.
Employers are therefore advised to start deducting the new rates in their February 2024 Payroll and remit the same by the ninth of every month. Please find the notice served to employers - https://www.nssf.or.ke/notice-to-employers-on-the-updated-nssf-rates for the new 2024 rates here.
Further downloads can be accessed here as follows:
https://www.nssf.or.ke/statement-on-the-nssf-act-45-2013-ruling - February 2024 Statement on the NSSF Act-45 - 2013 ruling
https://www.nssf.or.ke/download/download-the-nssf-act-45-of-2013?wpdmdl=3590" - NSSF Act 45 of 2013 download link
