The National Social Security Fund (NSSF) has directed employers to continue deducting and remitting pension contributions at the current enhanced rates, maintaining that the National Social Security Fund Act, 2013, remains operational despite ongoing court proceedings challenging the law.
In a statement issued on Friday, Managing Trustee and CEO David Koross said the Fund's current contribution structure remains legally valid and is supported by both the Constitution and a Court of Appeal judgment delivered on February 3, 2023.
The clarification comes days after the Court of Appeal declined to suspend a judgment that declared the NSSF Act, 2013 unconstitutional, a decision that sparked debate over whether employers should return to the previous contribution rates of Sh200 from employees and Sh200 from employers.
According to NSSF, the issues still before the courts do not affect the contribution levels currently being implemented under the law.
“This is to clarify to our members and stakeholders that the NSSF Act is still in force on account of the Judgement of the Court of Appeal rendered on February 3, 2023. The issues pending determination by the Court do not in any way affect the contribution rate by employers and employees, which remains that of the year four (4) cycle in accordance with the Third Schedule of the NSSF Act,” the statement read.
The Fund warned employers and workers against reverting to older contribution levels, saying compliance with the existing rates remains mandatory.
“All employers and workers are reminded to comply to avoid denying their employees a benefit that has already crystallized and unwarranted penalties,” it added.
NSSF used the statement to defend the reforms introduced under the NSSF Act, 2013, which transformed the Fund from a provident fund into a mandatory pension scheme covering workers in the formal and informal sectors as well as self-employed Kenyans.
The law introduced a two-tier contribution system with gradual increases in deductions by both employers and employees. It also expanded mandatory registration, strengthened enforcement measures and shifted the focus from lump-sum benefits to retirement income, with the aim of improving long-term social protection.
The Fund argued that the reforms are necessary to address widespread retirement insecurity in the country, noting that a large number of workers still lack pension savings.
“In Kenya today, only 20% of workers have a retirement savings plan. Due to the inadequacy of savings in previous years, only 6% depend on pension, over 1.2 million elderly Kenyans sleep hungry, while over 0.8 million elderly persons live alone, fighting abject poverty,” the statement highlighted.
NSSF said the enhanced contribution framework is intended to improve retirement outcomes and reduce poverty among older citizens.
“The importance of saving for retirement cannot be overstated, looking at how old-age poverty is rampant across the country,” it added.
The Fund also pointed to its financial performance as evidence that the reforms are yielding results. According to the statement, NSSF's assets had grown to about Sh715 billion as of March 30, 2026, based on unaudited figures.
It attributed the growth to higher contributions and investment returns generated through the management of members' funds.
NSSF further reported that members received strong returns over the last two financial years.
“In the 2023/2024 Financial Year, the Fund declared a net return to members of 11% while in the following year, 2024/2025, a net return of 17% was declared to members,” the statement noted.
The Fund said the reforms are also intended to bring Kenya closer to other countries in the region that have stronger retirement savings systems.
While acknowledging the ongoing legal dispute, NSSF maintained that it will continue safeguarding members' savings and comply with any future court decisions. It also urged stakeholders to disregard what it described as misleading opinions advocating a return to outdated contribution rates.