The Central Organization of Trade Unions (COTU) says it supports President William Ruto’s proposal to increase NSSF monthly deductions from Sh200 to six per cent of the workers’ gross salaries.
COTU says that the Sh200 flat rate is “critically inadequate”.
“We fully support the increment in NSSF deductions from the current Sh200 to the 6 per cent rate as captured in the NSSF Act,” COTU Secretary-General Francis Atwoli said in a press statement on Tuesday, November 1.
“This increase has been long overdue, considering it is not just the lowest in the East African region, but also has been COTU-Kenya’s view that the current deductions are critically inadequate,” said Atwoli.
The trade unionist’s remarks come on the back of President Ruto’s quest to have cases opposing new NSSF deductions be dropped.
According to the president, the cases had been filed by COTU-Kenya and the Federation of Kenya Employers (FKE).
COTU, however, says it doesn’t have any active court case against the increased NSSF deductions.
“We would like to make it clear that COTU-Kenya does not have any active case against NSSF. COTU (K) had, however, in 2014 filed a case seeking an order to suspend the implementation of the NSSF Act of 2013 for reasons that, first, workers, through COTU (K) were not represented in the NSSF Board and, second, the NSSF did not have a substantive Managing Trustee who would have overseen the implementation of the Act.
“These two reasons, namely, the lack of proper governance structure, then, within NSSF, and the lack of workers’ representatives in the NSSF Board necessitated the case against NSSF. However, COTU (K) withdrew the case against NSSF in October 2020 after the two issues were resolved,” said Atwoli.
The veteran trade unionist said an increase in NSSF deductions would cushion employed Kenyans against poverty at old age.
“For instance, a worker who has worked for 30 years being deducted Sh200 monthly can only take home Sh144,000 (subject to inflation) upon retirement. Such an amount ultimately leaves retirees exposed to old-age poverty,” said Atwoli.
“On the other hand, a worker earning Sh50,000 a month and having worked for 30 years being deducted 6 per cent with an equal top-up from the employer will take home Sh2.1 million (subject to inflation) upon retirement.
“We, therefore, call upon Kenyan workers to fully embrace the 6 per cent rate as it is within the law and also of great benefit to them upon retirement,” added the COTU boss.
With COTU now saying that it doesn’t have any active case against the NSSF, only the FKE is now left with gripe against the NSSF.
In mid-September 2022, the High Court blocked the government from increasing mandatory NSSF deductions.
The court ruled that the requirement was not subjected to public participation in breach of the Constitution, which demands community input before major decisions are taken.
Through the NSSF Act 2013, the government had sought to raise monthly contributions by employees from the current Sh200 monthly, and demanded employers match the pay-out to counter what the President has envisioned.
The ruling added: “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.”
Ruto now hopes to regularise the Act, and make the NSSF proposal a law.
“We will work closely with Parliament so that we can provide the framework that Kenya will be safe in, and so that we can leave an inheritance to our children. Remember we are doing this because saving is a must,” Ruto said on September 24.
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