The National Social Security Fund Act No. 45 of 2013 (the New NSSF Act) commenced on 10 January 2014. The provisions of this Act were however challenged between 2014 and 2015 and therefore its implementation has not taken place.

Meanwhile, the state pension system that is in place is the National Social Security Fund that is set out in National Social Security Fund Act Cap. 258 (the Old NSSF Act).

The National Social Security Fund (NSSF) is a national scheme whose main objective is to provide basic financial security benefits to Kenyans upon retirement. It was set up as a provident fund to provide benefits in the form of lump sum payments. It works on a contributory basis. This fund, however, only covers formal sector employees thus limiting its coverage by excluding informal sector employees.

The statutory contributions are set at 10 per cent of the employee’s pay, half of which is paid by the employer.

There is also the Public Service Pension Scheme that provides benefits for public service employees (civil servants). It is governed by the Pensions Act and the Public Service Superannuation Scheme Act. The scheme under the Pensions Act operates on a non-contributory basis. With the coming in of the new Public Service Superannuation Scheme Act, the aspect of a contributory scheme has been introduced to the Public Service.

Please click here to access Getting the Deal Through: Pensions Retirement Plans 2017