The high court has invalidated the NSSF Act of 2013 that sought to have the National Social Security Fund, NSSF, increase monthly deductions from the current Ksh. 200 to Ksh 2068.
In their ruling, Justices Monica Mbaru, Hellen Wasilwa and Mathews Nduma stated that the act was not presented to the senate for enactment as a money bill, despite impacting county government workers.
“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, enrol or list and contribute their earnings or any party,” said the judges.
“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.”
NSSF’s move was intended to create a stronger retirement package for employees, stating that the dependency rate among senior adults was too high with the current contributions.
According to the Act, higher earners were to pay Ksh. 2068 representing a maximum pensionable amount of Ksh. 34, 476, while employers were supposed to contribute a similar amount for their employees.
Those earning Ksh. 6000, which is the minimum wage, would part with Ksh. 360 lesser, with employers contributing the same amount to make it Ksh. 720, representing 12 per cent of the Ksh. 6000.
Petitioners in the case argued that the establishment of the Act did not meet the threshold of public participation required to ratify such a decision.
They further argued that giving NSSF such an advantage would grant them unnecessary favour against other employers and would be in contravention with the County Government’s Act of 2012 by seeing them contribute more than 6 per cent of an employee’s earnings.
The current contribution of Ksh. 200 was lastly reviewed upwards from Ksh. 160 in 2001.
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