NSSF New Monthly Contributions And Interest Rates In Kenya 2021

NSSF came into existence in 1965 after an act of parliament. NSSF rates in Kenya are guided by the NSSF Act 45 of 2013, which was passed in January 2014. The act also changed the organization from a provident fund to a pension scheme. Employers and employees should stay up to date with the stipulated rates for every year to align with the government’s regulations.

NSSF Contribution Rates

According to the 2013 act, the Lower Earning Limit (LEL) is KShs. 6000 while the Upper Earning Limit (UEL), on the other hand, is KShs. 18000. NSSF contribution rates comprise a total of 12% of the employee’s entire pensionable salaries and wages.

NSSF monthly rates are divided into two equal parts whereby the employer pays 6%, and the employee pays the remaining 6%. The upper limit is increased every year up to the fifth year, matching the national average earnings as per the Kenya National Bureau of Statistics.

The contributions, which are pertinent to the salaries and wages that fail to meet a maximum of KShs 720 of the Lower Earning Limit, will be credited to the Tier I account. The excess amount for wages and salaries between the Upper Earning Limit and the Lower Earning Limit at a maximum of KShs 1440 will be credited to the Tier II account.

Besides the monthly payments, members can also top up their contributions. The top-up forms are available for download on the organization’s website, and the guidelines are also simple and easy to follow.

NSSF New Rates Format

The NSSF Kenya’s new contribution rates have been increased to grow Kenyans’ foundation for a better future. The contribution of workers ranges from a minimum of KShs. 360 to a maximum of KShs. 1080 every month for the first year.

According to a previous court ruling on NSSF new rates, employers will contribute a similar amount as the employees to secure the workers’ retirement. NSSF rates for self-employed and voluntary contributors will be KShs. 200 up from the previous KShs. 100 per month.

Stipulations For The Employer And The Employees On The New NSSF Rates

The revised NSSF rates require a deduction of 6% of the worker’s pensionable earning. The employer should match this percentage for employed workers, making the total deduction 12% of the worker’s earnings. Below are the stipulations that the employer and the staff need to observe according to the new NSSF contribution rates:

• The new act requires that all employers with more than one employee in their businesses immediately register as contributing employers with the NSSF.
• Employers should ensure that all their workers are registered members of NSSF.
• The NSSF contributions should be deducted and submitted in full by the 15th of every month, the payment deadline.
• Late payment of the monthly contribution will attract a 5% penalty of the entire monthly donations for every delayed month or the section of the month in which the employer or worker has failed to remit their contributions.
• The workers should maintain updated and correct records, which entail their earnings and any other relevant details.
• Any employer or an employee who fails to observe any of the new NSSF rates’ stipulations will be considered to have committed a criminal offence. Therefore, they may be liable for prosecution.
• Employees should provide accurate and current information for registration. They also have should be aware of their social security rights. These are clearly stipulated on the NSSF guidebook, which is available for download on the website.

NSSF Rates Calculator

Thanks to technology, you can now calculate what rate you should be contributing from the comfort of your phone. This knowledge helps to ensure that your employer is making the correct deductions. For voluntary contributors, the calculator helps them manage their funds effectively.

Users only need to enter their gross salary, and the calculator will do the job. In case of further inquiries or clarification, you can always visit your nearest NSSF office or contact them on their social media platforms like Facebook.

NSSF Kenya Interest Rates

Currently, the NSSF pension savings earn an interest of 7% per year. This rate has been in effect since 2018. The payouts are credited to the depositors’ accounts. The steady increase from previous years has seen more retired people enjoy their post-employment years.

The rise of the NSSF Kenya interest rates is a result of the organization’s investment income. The fund has seen an increased flow of dividends from investments in companies like BAT and Safaricom. The organization has also been investing in government treasury bonds.

The national parastatal management is constantly reviewing the NSSF rates in Kenya to give Kenya’s workforce a dignified retirement. The fund has continually sought its financial security by investing in worthwhile ventures that will have maximum returns so that its members can benefit maximally.

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