We must find ways, through Parliament, and reform the moribund NSSF as championed by President Ruto.
More Kenyans are saving for their old age through the National Social Security Fund (NSSF) since the government began implementing the 2013 NSSF Act, putting the public pension fund on a growth trajectory even as occupational schemes stagnate.
New data shows that 11.4 per cent of Kenyans saved through the fund this year, up from 9.5 per cent of the population putting money aside in 2021.
This is despite those saving through workplace schemes stagnating at 1.5 per cent over the same period, according to data from the central bank's Finaccess Household Survey 2024.
"The majority of the adult population saving for retirement did so through NSSF at 11.4 per cent, which remains the dominant retirement product," the survey said.
"The use of NSSF saw an improvement from 9.5 per cent in 2021, due to the start of the implementation of the NSSF Act 2013 in 2022, following the lifting of the court injunction that had been in place since 2013."
According to the report, the implementation of the NSSF Act has increased compliance by employers to contribute for their employees, leading to an increase in the number of Kenyans saving for retirement through the scheme.
The data corroborates earlier statistics showing how NSSF collections increased by Sh10.9 billion to Sh26.8 billion in the year to June 2023 following the implementation of the new NSSF Act since February last year, which increased mandatory pension contributions from a flat Sh200.
Since its implementation, the lowest contributions to the NSSF have risen to Sh360 for low-income workers, while the impact on higher earners is still being felt as the government gradually increases contributions, with the expected outcome that by the fifth year, each worker should be contributing six per cent of their salary to the mandatory pension, with employers matching.
"The use of occupational pension schemes remained the same in both periods," the report said.
Since the implementation of the NSSF Act 2013 began, many employers who had private pension schemes for their employees have reduced these contributions as the NSSF share rises, which may have hindered their growth.
Overall, the survey notes that pension utilisation in the country has increased to 11.8 per cent from 10.6 per cent in 2021.
The Central Bank survey notes that more Kenyans living in urban areas are saving for retirement compared to their counterparts in rural areas, reflecting the fact that more urban dwellers have stable jobs.
Among pension users in the country, the majority (94 per cent) use it to make contributions through pension schemes, while 6 per cent use it to receive pension payments after retirement.
