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Friday, September 23, 2022 — Plans by President William Ruto to reform the National Social Security Fund (NSSF) to have the government deduct more money from workers have been dealt a severe blow.
This is after a three-judge bench of the Employment and Labour Relations Court declared the NSSF Act null and void, ordering a stop to further mandatory deductions of employee earnings.
In a judgment following a consolidated petition filed by the Kenya County Government Workers’ Union, Kenya Tea Growers Association, the Agricultural Employment Association, and six others, the court cited monopoly and violation of workers’ freedom of choice.
The court ordered NSSF to refrain from compelling or requiring mandatory listing of employers or employees whether registered as a member of any retirement benefits scheme or not.
The judges also found the NSSF Act to have been inconsistent with the provisions of Article 10 (1) (b) and (c) of the Constitution “as read with Section 3 of the Competition Act.”
They noted that to the extent the law gives the NSSF a monopoly in the provision of pension and social security services in the country; the legal basis for the Fund is unconstitutional, null, and void.
The court also noted provisions under the NSSF Act conferring a mandate on approval of allowances and fees to the Cabinet Secretary for Labour; a task that should otherwise have been assigned to the Salaries and Remuneration Commission violates the Constitution.
Also impugned is Section 20 of the NSSF Act No.45 of 2013 providing for mandatory registration of employees to the Fund.
During his campaigns, Ruto had promised to increase NSSF deductions from the current Sh200 to Sh2,000 per month to encourage a saving culture.
The Kenyan DAILY POST