Atwoli makes u-turn, backs Ruto proposal on higher NSSF deductions

Francis Atwoli

Cotu secretary general Francis Atwoli. He says the current NSSF deduction rate is inadequate and is the lowest in the East African region.

Photo credit: Tonny Omondi | Nation Media Group

The Central Organisation of Trade Unions (Cotu) has supported President William Ruto’s proposal to increase retirement savings deductions from the current Sh200 to six percent of an employee’s monthly salary.

Cotu secretary general Francis Atwoli said the current National Social Security Fund (NSSF) deduction rate was inadequate and is the lowest in the East African region.

“For instance, a person (who) has worked for 30 years with monthly deductions of Sh200 will take home Sh144,000 upon retirement, which is not sustainable and (this) exposes them, at old age, to poverty,” Mr Atwoli said in a statement sent to newsrooms.

Upon implementation of the six percent monthly deduction rate, such a person, assuming they earn Sh50,000 a month, and having worked for the same period, would take home Sh2.1 million at retirement after an equal top-up from their employer.

While championing the increase, President Ruto said the current rate was too low to build savings that can offer a decent living to workers upon retirement, making it his pet project immediately after he was sworn in.

According to Dr Ruto, Kenya is a giant punching way below its weight, citing the bigger savings account in neighbouring Uganda and Tanzania, both with smaller economies than Kenya.

“We would like to make it clear for all Kenyan workers and Kenyans, in general, that we fully support the increment in NSSF deductions from the current Sh200 to the six percent rate as captured in the NSSF Act,” said Mr Atwoli.

“Cotu was guided by the logic that in coming up with a worker-friendly NSSF Act, Cotu must champion and advocate for the expansion of social protection and retirement benefits, first horizontally to increase the coverage to include the Jua kali sector (informal sector) and second, vertically to increase the rate to realise adequacy for retirement benefits,” added Mr Atwoli.

He explained that Cotu had sought a court order in 2014 to suspend the implementation of the NSSF Act that proposed a six percent deduction because they did not have representation in the NSSF board and had no management trustee to oversee the Acts implementation.

However, he called upon Kenyan workers to fully embrace the proposed rate, saying that it is within the law and is also of great benefit upon retirement.


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