NSSF reassures workers of future Sh20 million pension despite deduction increases
The NSSF has steadily increased its contribution rates since the passage of the NSSF Act of 2013.
The National Social Security Fund (NSSF) has defended its ongoing increases in pension contributions, arguing that workers today will retire with a substantial pension if they save consistently.
The fund’s Managing Trustee, David Koross, presented this view during the seventh annual general meeting on April 25, stating that employees who begin their contributions now could take home up to Sh20 million in pension after 30 years of saving.
Koross referred to simulations conducted by NSSF, which indicate that the current savings rate of 6% is enough to ensure a "substantial" retirement package.
"We have done a simulation, and if we continue at this rate, in the next 30 years, those who are joining employment, including those we have recruited at NSSF, will go home with about Sh20 million at the bare minimum," he said.
The NSSF has steadily increased its contribution rates since the passage of the NSSF Act of 2013, with the aim of creating a more robust pension system for Kenyans.
The increase in contributions reached a major milestone in 2023 when monthly payments surged from Sh400 to Sh2,160. This figure was further matched by employers, who have also shared the cost.
Next year, employees will face an even higher rate of Sh12,960 per month, as the government seeks to raise the country’s overall savings rate.
While these increases are intended to boost pension savings, they have put additional pressure on workers' wages, especially as many struggle with the ongoing high cost of living.
Since February 2023, NSSF has seen a marked increase in total savings, with the fund receiving an additional Sh220 billion in contributions.
Despite the immediate financial challenges posed by these higher deductions, Koross remains optimistic about the long-term benefits for contributors.
The higher contributions are set to continue over the coming years, with hopes that they will secure the financial future of workers, even as they face short-term challenges.