President William Ruto has strongly defended his administration’s decision to increase contributions to the National Social Security Fund (NSSF), describing it as a transformative move toward securing Kenya’s financial future.
Speaking at the Cooperative University of Kenya in Karen, Nairobi, on Wednesday, President Ruto said that Kenya is on track to double its total savings accumulated over the past six decades by the end of 2025, thanks to the bold reforms implemented since 2023.
“By 2027, we will have saved Ksh.1 trillion. All this is because we have made bold decisions,” said Ruto. “Many people don’t believe what I’m saying, but you will be shocked. That is how to transform a nation, and I am going to confound the naysayers.”
The 2023 amendments to the NSSF Act introduced new contribution tiers and brought informal sector workers into the pension scheme’s fold. Under the new structure, employees contribute 6% of their gross monthly pay to the NSSF, which is matched equally by employers.
As of 2024, the maximum deduction stood at Ksh.2,160 per employee. However, this is set to double in February 2025, when the cap will rise to Ksh.4,320 per employee, bringing the total monthly contribution (including employer match) to Ksh.8,640.
The structure includes Tier I contributions on pensionable earnings up to Ksh.7,000, remitted directly to the NSSF, and Tier II for higher earnings, which employers can channel to alternative pension schemes.
Data from the Retirement Benefits Authority (RBA) reveals a significant spike in pension savings. Contributions rose from Ksh.62.73 billion in the first half of 2022 to Ksh.118.80 billion in the second half of 2024 nearly doubling within three years.
In 2023 alone, contributions climbed from Ksh.83.14 billion in the first half to Ksh.105.65 billion in the second half. By the end of 2024, the total contribution had reached Ksh.234.90 billion, up from Ksh.132.99 billion in 2022.
With these increases, the government aims to enhance retirement security for Kenyans and foster a robust savings culture critical for national economic growth.
