NSSF Issues Fresh Directive to Employers After Court Setback Over Enhanced Contributions
NSSF has directed employers to continue deducting and remitting enhanced pension contributions despite a recent Court of Appeal ruling that declined to suspend a judgment declaring the NSSF Act, 2013 unconstitutional.
The National Social Security Fund (NSSF) has moved to reassure employers and workers that enhanced pension contribution rates remain in force, even after suffering a setback in court over the legality of the NSSF Act, 2013.
In a statement issued on Friday, June 5, the state pension scheme clarified that employers should continue remitting contributions under the current rates, dismissing claims circulating among members of the public that deductions should revert to the previous Ksh200 employee and Ksh200 employer contributions.
The clarification comes days after the Court of Appeal declined to grant NSSF orders suspending a judgment that had declared the NSSF Act, 2013 unconstitutional, a decision that sparked confusion among employers and salaried Kenyans.
“This is to clarify to our members and stakeholders that the NSSF Act is still in force on account of the judgment of the Court of Appeal rendered on February 3, 2023,” NSSF stated.
The Fund further emphasized that the matters currently before the courts have no effect on the contribution rates currently being deducted from workers’ salaries.
“The issues pending determination by the Court do not in any way affect contribution rates by employers and employees, which remain those of the year four cycle in accordance with the Third Schedule of the NSSF Act,” the statement added.
Court Rejects NSSF Application
The latest directive follows a ruling delivered by the Court of Appeal on May 29, 2026, in which judges dismissed NSSF’s application seeking to suspend an earlier judgment invalidating the NSSF Act, 2013.
While the appellate judges acknowledged that NSSF had raised arguable legal questions worthy of consideration, they ruled that this alone was insufficient to justify granting a stay order.
The court found that NSSF had failed to demonstrate that allowing the judgment to take effect would cause immediate or irreparable harm to Kenya’s pension sector.
In its submissions, NSSF warned that invalidating the law could disrupt pension collections, affect the popular Haba na Haba savings programme, create uncertainty among contributors, and interfere with the management of billions of shillings in retirement savings.
However, the judges ruled that the Fund had not provided adequate evidence to support those claims.
The court noted that NSSF had failed to furnish audited financial statements, actuarial assessments, or other documents showing the extent of the potential financial and operational disruption it alleged.
Judges further observed that pension contributions had previously been collected under the older legal framework for many years without evidence of systemic failure or governance challenges.
Why NSSF Is Standing Firm
Despite the ruling, NSSF insists that the enhanced contribution framework remains legally operational and continues to defend the reforms introduced under the 2013 law.
The Fund argues that the increased deductions are critical in strengthening retirement savings for Kenyan workers and reducing poverty among retirees.
According to NSSF, the reforms have significantly boosted the Fund’s financial position, with total assets growing to approximately Ksh715 billion as of March 30, 2026.
The agency says it remains committed to protecting members’ savings while awaiting further directions and the final determination of the ongoing legal battle.
For now, employers across the country have been instructed to continue applying the current contribution rates until the courts issue a definitive ruling on the matter.
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