NSSF lines up more benefits under new laws
Posted Thursday, August 30 2012 at 19:39
The National Social Security Fund (NSSF) has recently been engaging key stakeholders, including the Central Organisation of Trade Unions (Cotu) and the Federation of Kenya Employers (FKE) to seek support for its new Bill.
Among other changes, employees, if the National Social Security Pension Trust Bill 2012 goes through, will have to pay a higher monthly contribution from the current Sh200.
Mugambi Mutegi caught up with the Fund’s acting managing trustee Tom Odongo to get a brief on the proposals and likely impact.
What is the overview of the National Social Security Pension Trust Bill 2012?
The Bill seeks to change the scheme from a provident fund to a pension scheme that handles members from formal and informal sectors. It envisages more benefits.
What does this mean?
Currently, the Fund pays members a lumpsum once they retire, but under the new design it will be monthly.
We propose that 30 per cent is paid at the point of retirement and the balance spread out monthly.
What are the new benefits in the proposed arrangement?
The current monthly subscriptions are not enough to make good savings and we are proposing that the contribution is raised to six per cent of gross salary to be set later with employers matching this amount.
One, it will have a maternity grant where we have suggested female members receive Sh10,000 per child upon delivery.
Discussions are ongoing on birth intervals and the number of children to be covered. The Bill also proposes to raise funeral grant from the Sh2,500 to Sh10,000.
There are complaints by dependants of deceased workers that benefits take long to be released. Explain.
The culture of Kenyans is that when they are employed at between 18 and 25 years, they use name of parents as the next of kin and 30 years down the line, they are yet to update.
This is usually a problem since the next of kin is required to present the burial permit for the funeral grant to be processed within 48 hours as well as a death certificate for us to start processing the deceased’s benefits.