Business

New law unlocks extra Sh4b a month for NSSF

Monday, December 11th, 2023 08:20 | By
New law unlocks extra Sh4b a month for NSSF
Central Organisation of Trade Union, Kenya Secretary general Francis Atwoli during the meeting between NSSF and COTU-K in Kisumu. PHOTO/Kepher Otieno

National Social Security Fund (NSSF) has increased monthly collections to Sh5.7 billion from Sh1.7 billion following implementation of the new law that enhanced contributions by workers and employers, a meeting in Kisumu was told.

Central Organisation of Trade Union (Cotu), Kenya, Secretary general Francis Atwoli who was flanked by NSSF Managing Trustee David Koros said the organisation currently collects Sh5.7 billion every month following the implementation of the NSSF Act,2013. They disclosed that NSSF now aims at increasing its monthly collections to Sh10 billion within the next one to two financial years and ultimate to Sh1 trillion in 10 years.

“The only way for NSSF to enhance its contributions from the current Sh5.7 billion monthly collections to over Sh10 billion is through strengthening their enforcement and compliance departments,” said Atwoli. For instance, he explained that the Sh2.7 billion that counties are yet to remit to NSSF shouldn’t be a matter of discussion if there is an effective compliance and enforcement unit that has the ability to impose fines.

Employees’ salaries

“A very good example is our neighbouring country of Tanzania where employers can delay in paying employees’ salaries but not in paying NSSF, NHIF, and PAYE because of the stringent compliance and enforcement measures by the Government and the Agencies,” said the COTU boss.

He was happy that in Tanzania, you cannot pay Sh100,000 today for NSSF and Sh90,000 tomorrow without a proper explanation of the difference.

“This we have witnessed in Kenya, where there are such variations. In fact, NSSF can help us protect jobs because when an employer has to justify the differences in collections to NSSF every month then they stop careless sacking and layoffs of workers,” he said. Moreover, NSSF needs to improve on its outreach to workers so that they stop the reported cases of opting out.

Atwoli was speaking during the consultation meeting between NSSF and COTU-K, at the Tom Mboya Labour college Kisumu.

He was flanked by Koros and directors from both sides, who engaged in discussion trying to dissect how they could push employers to remit timely dues to the statutory body.  Koros claimed that some of the State-run institutions have been collecting dues from the workers and not remitting promptly to NSSF. The problem has been worse in the sugar factories which have been operating in financial crisis over the years among other statutory bodies. Koros, however, was happy and optimistic that the negative trend, may change as the new Kenya Kwanza administration takes bold steps to improve the management of the State-run sugar factories. Not so long ago, the government declared to write off the huge debts facing the sub sector.

Sugar industry

The sugar industry is indebted to the tune of Sh117 billion. This has now been cleared with the National Treasury after both Lower and upper House approved the bill to write off the debts, which was presented to the House, by the Agriculture and Livestock Parliamentary Committee Chairman Dr John Mutunga.

This, sets stage for the proposed leasing of the sugar factories by new investors, which Koros hoped would now be able to sort out the decades old trouble of the millers failing to remit statutory deductions in good time. Koros regretted that as things stand now, about 84 per cent of Kenyan adults, still lack social security and this affected their net revenue returns.

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