CJ Koome to appoint bench to hear petition challenging increased NSSF contributions
Chief Justice Martha Koome is expected to empanel a bench of judges to hear a workers' appeal to stop the government's decision to enhance National Social Security Fund (NSSF) contributions.
The increased monthly contributions are set to take effect on Thursday, March 9, 2023.
On Monday, March 6, 2023, the Supreme Court's Registrar Bernard Kasavuli forwarded the file to the CJ's office to enable her appoint judges to determine the lawsuit lodged by 6,000 pensioners.
"I direct that this matter be referred to the President of the Court to constitute a bench to hear and determine the notice of motion application on record filed by the appellants Once the decision of the court is made parties will be notified on the same," Kasavuli said.
The registrar further said the parties will also be informed on the ruling date by the bench on the application seeking a conservatory order to bar the government from implementing the Court of Appeal decision that paved the way for the increase of the NSSF contributions.
The directives by the apex court registrar were issued after the NSSF Board of Trustees, the Retirement Benefits Authority and the Federation of Kenya Employees (FKE the Attorney General and other parties who are sued in the case confirmed they had filed all their pleadings in the matter as earlier directed by the court.
Over 6,000 pensioners through the County Pensioners Association petitioned the top court in the country wanting it to set aside the decision of the appellant court dated February 3, 2023, and declare mandatory contributions to NSSF unconstitutional.
The petitioners through lawyer Muthomi Thankolu want the Supreme court to issue orders barring the NSSF Board of Trustees, the Retirement Benefits Authority and the Federation of Kenya Employees (FKE) from increasing workers’ monthly deductions pending the hearing and determination of the case.
"The public will suffer substantial and irreparable harm (including but not limited to a run on pension schemes superior to the NSSF) unless this Honourable Court stops the implementation of the impugned Act pending the hearing and determination of the Applicant’s appeal," Lawyer Muthomi argues.
They challenge the decision on grounds that the Court of Appeal in its decision misinterpreted and misapplied various provisions of the Constitution when it allowed a ten-fold increase to Sh2,068 in workers’ monthly contributions.
"We seek the court to suspend the impugned implementation of the Court of Appeal decision as there is a serious threat of monopoly and emasculation that the impugned Act (especially sections 18, 19, 20 and 71) poses to the entire pensions industry —specifically, the threat of mass transfers of employees from superior pension schemes to the NSSF," the County Pensioners Association states in court papers.
It is the County Pensioners Association's argument that the conservatory orders they seek will not cause any harm, damage or prejudice to the government as allowing the state to implement the impugned NSSF Act during the pendency of their appeal would aggravate the denial/miscarriage of justice already occasioned on them.
The disputed decision by Justices Hannah Okwengu, Mohamed Warsame and John Mativo has approved the NSSF Act of 2013, saying that it was subjected to public participation as required by the constitution.
This was after the bench of three judges overturned a judgment delivered last September by the Employment and Labour Relations Court, which found that the NSSF Act 2013 was unconstitutional and blocked the government's bid to increase workers’ monthly deductions.
Under the Act, the NSSF sought to build a bigger retirement pot and offer workers monthly stipends after their retirement as opposed to the current one-off payment.
The contributions were last reviewed in 2001 when the rate was increased to Sh200 from Sh160.
The NSSF had 348,291 registered members as of June 2021, with an investment portfolio of Sh284.9 billion. It beat inflation last year when savings increased by 10 per cent.
The appellate court bench ruled that the Labour court wrongly assumed jurisdiction in a matter that should have been handled by the High Court.
The case was first filed by Kenya Tea Growers Association and Agricultural Employers’ Association who moved to the Labour court to stop the proposed increase, arguing that the law supporting the increment was unconstitutional.
Justices Mathews Nduma, Hellen Wasilwa and Monica Mbaru in a ruling delivered last year quashed the NSSF Act of 2013.
If the Supreme Court fails to issue orders suspending the planned implementation of the NSSF Act top earners from March 9 will now be deducted up to Sh1,080 from the current Sh200. This amount could be increased further in the next five years.
