What is the most painful news any worker can receive other than news about salary reduction?
The National Social Security Fund (NSSF) says it is in out-of-court talks with workers’ unions, aiming to unlock a dispute that could see retirement deductions rise to Sh1,080 from Sh200 and increase every year for the next five years.
The stalled 2013 Act that introduced the changes also sought to raise monthly contributions from employers to match each employee’s deductions.
NSSF Board of Trustees’ chairman Julius Karangi Monday said the discussions with the Central Organisation of Trade Unions (Cotu) and the Federation of Kenya Employers (FKE) will see it raise the deductions “in the course of this year.”
“We have been engaging both FKE and Cotu so as to unlock the Act within the next two months. There were a few issues, but whatever concerns were there have been sorted. It is just a matter of sitting down and operationalising the Act,” he said in Nairobi.
“If that does not happen, the fund is going to shrink over time. We don’t want to find ourselves in a situation where we have to liquidate assets to pay retirees.”
If implemented, the stalled NSSF Act 2013 will see workers compelled to save more for retirement while employers will face increased compliance costs.
This is amid a history of board wrangles and misappropriation of workers’ contributions at the State agency that was founded in 1965.
In the stalled Act, total pension contribution for both the worker and employee was supposed to be Sh2,160, being 12 percent of proposed maximum pensionable earnings of Sh18,000.
Both employees and employers were to remit six percent each. Minimum pensionable earnings was to be Sh6,000.