Ward representatives will now be required to contribute to the National Social Security Fund (NSSF) under the Tier II category, after the Senate removed a clause that had proposed to exempt them from the deductions.

The change affects a draft law seeking to establish a new pension scheme for Members of County Assemblies (MCAs).

The amended version of the Bill, which has since been sent to the National Assembly, now compels both the MCAs and their respective County Assembly Boards to remit the contributions to the NSSF.

The Bill was introduced in the Senate in February last year by Majority Leader Aaron Cheruiyot.

It aims to provide a comprehensive pension structure for county legislators, including setting out transitional guidelines for those already enrolled in existing retirement schemes.

Initially, the proposal had included a provision that would have excused MCAs and their employers from the mandatory Tier II NSSF contributions.

However, this clause has now been removed in the updated version that is under review by the National Assembly.

The implementation of the NSSF Act 2013 began in February 2023 after delays caused by legal battles.

The law introduced two contribution levels—Tier I and Tier II. Currently, the maximum combined monthly contributions are set at Sh960 for Tier I and Sh7,680 for Tier II, with the amounts split equally between the employee and the employer.

Under the regulations, Tier I contributions are calculated at six percent of the lower earnings limit, which is Sh8,000, while Tier II is six percent of the difference between the lower and upper earnings limits.

This year, the upper limit doubled from Sh36,000 to Sh72,000.

The amendment means that MCAs can no longer rely on the option in the NSSF law that allows workers to redirect Tier II contributions to private pension schemes through a process known as opting out.

This provision has been at the centre of disputes in recent years, with several schemes, particularly those for county government workers, accusing NSSF of blocking their opt-out applications.

In November last year, the Council of Governors (CoG) formally requested NSSF to exempt all counties and their employees from Tier II contributions.

However, CoG chief executive Mary Mwiti said the request was turned down.

“NSSF said each county must make individual applications and also clear all debts and obligations owed to the fund before being considered for exemption,” she said.