Sharp Daily
No Result
View All Result
Wednesday, June 25, 2025
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
Sharp Daily
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team
No Result
View All Result
Sharp Daily
No Result
View All Result
Home News

Why the NSSF Act was good for the pensions industry

Joshua Otieno by Joshua Otieno
August 9, 2024
in News
Reading Time: 2 mins read

The enactment of the NSSF Act of 2013 marked a significant milestone for the pensions industry in Kenya. At a time when the need for financial security in retirement was becoming increasingly apparent, the Act provided a much-needed overhaul of the existing system, which had long been criticized for its inadequacies.

Prior to the 2013 reforms, the National Social Security Fund (NSSF) was primarily a provident fund, offering lump sum payments upon retirement, disability, or death. While this system provided some level of support, it fell short of ensuring long-term financial security for retirees. The NSSF Act of 2013 transformed the fund into a social insurance pension scheme, with the promise of offering regular income to retirees for the rest of their lives. This shift was not only timely but necessary, as it aligned the NSSF with international best practices in pension provision.

One of the most significant changes brought about by the Act was the introduction of mandatory contributions for both employees and employers. This move was crucial in creating a sustainable source of funding for the pension scheme, ensuring that retirees would receive benefits that were both predictable and adequate. By mandating contributions based on a percentage of an employee’s earnings, the Act also introduced a level of equity into the system. Higher earners would contribute more and, in turn, receive benefits that were proportionate to their contributions. This progressive approach helped to address the disparities that existed under the previous system, where contributions were flat-rate and did not reflect the varying levels of income among workers.

The Act also introduced a two-tier structure, with a universal pension for all workers and the option for higher earners to contribute more for increased benefits. This encouraged a culture of savings and financial responsibility.

RELATEDPOSTS

Still sending tier II contributions to NSSF by default? Time to reconsider.

June 13, 2025

Atwoli defends NSSF contributions amid political debate

February 5, 2025

In addition, the Act broadened the scope of the NSSF, extending coverage to the informal sector, which represents a significant portion of Kenya’s workforce. Prior to the Act, workers in the informal sector were largely excluded from formal pension arrangements, leaving them vulnerable in old age. By making provisions for this group, the NSSF Act of 2013 took an important step towards achieving universal pension coverage, ensuring that all Kenyans, regardless of their employment status, could look forward to a secure retirement.

Previous Post

Carry Trades unravel as Japan’s interest rate shift rattles markets

Next Post

Uber Kenya’s electric motorbike rides surge 94% in Nairobi amid green mobility push

Joshua Otieno

Joshua Otieno

Related Posts

Investments

Investor shift to long term bonds drives oversubscription in CBK’s reopened auction

June 19, 2025
News

The real price of Israel – Iran Conflict for Kenya.

June 19, 2025
Economy

Resilient but strained: Kenyan firms speak out in May 2025 CEO survey.

June 19, 2025
News

Co-op Bank posts KES 6.9 billion profit in Q1’2025

May 16, 2025
Agriculture And Economy
News

Lets get Kenya out of FATF list

May 9, 2025
News

The downside of Impact Investing

May 2, 2025

LATEST STORIES

How Kenya can compete with global employment markets

June 24, 2025

Why Athi River deserves your investment

June 24, 2025

Parliament slashes tax on digital asset trades: What this means for investors

June 23, 2025

Understanding Joint Ventures: A strategic tool in modern business

June 23, 2025

How bushy can a bush safari get?

June 20, 2025

Understanding SPVs

June 20, 2025

Why small investments are a power move

June 20, 2025

Social consequences of the tax relief for gamblers

June 20, 2025
  • About Us
  • Meet The Team
  • Careers
  • Privacy Policy
  • Terms and Conditions
Email us: editor@thesharpdaily.com

Sharp Daily © 2024

No Result
View All Result
  • Home
  • News
    • Politics
  • Business
    • Banking
  • Investments
  • Technology
  • Startups
  • Real Estate
  • Features
  • Appointments
  • About Us
    • Meet The Team

Sharp Daily © 2024