Unremitted deductions to the National Social Security Fund (NSSF) reached a cumulative Sh5.1 billion in the year to June 2025, revealing the swelling value of missed benefits to employees.
The unremitted contributions for the review period alone comprised Sh1.01 billion from members and Sh1.01 billion from employers, tallying to Sh2.03 billion. Accrued unremitted contributions to the fund rose from Sh3.14 billion in the prior year.
Unremitted NSSF deductions deny employees their rightful benefits as the contributions are not invested in a timely fashion as envisioned.
The value of the accrued contributions has risen amid higher NSSF deductions which are set to reach as much as Sh6,480 per month for employees at the end of this month.
NSSF says it is engaging in a variety of remedies to recover the unremitted funds including penalties which top Sh11.6 billion.
“The fund accrued unremitted contributions amounting to Sh5.1 billion. The arrears have attracted penalties amounting to Sh11.6 billion which is not included in the financial statements because of prudence considerations,” the NSSF said in its latest annual report.
“The fund has instituted recovery efforts through alternative dispute resolution, court action and intergovernmental relations technical committee for cases involving defunct local authorities.”
Employers risk fines that run anywhere from millions to billions of shillings for the non-remittance of the deductions. The NSSF Act sets the penalty for a default in payment at five percent of the amount of that contribution which shall be added to the contribution for each month.
The non-remittance of funds to the NSSF mirrors the plague faced by other pension schemes including the State’s Public Service Superannuation Scheme (PSSF).
The government had failed to remit deductions of Sh1.2 billion to the civil servants’ pension scheme according to the Office of the Auditor General's report for the year to June 2025.
Delays in remitting the deductions means the funds have less time to earn returns for workers, hurting their benefits at retirement.
The NSSF received enhanced contributions in the period against the backdrop of higher employer/employee deductions.
Total contributions received for the year stood at Sh81.9 billion from Sh59.1 billion previously.
The contributions comprised Sh28.8 billion as Tier I and Sh52.5 billion in Tier II contributions.
The remaining balance covers Sh28.9 million in contributions to the old provident fund and Sh568.5 million to the new provident fund.
The Retirement Benefits Authority (RBA) said previously that it was pushing for changes to the law to rein in the chief executive officers (CEOs) and accounting officers of State agencies who collect but fail to remit the statutory deductions.
“From where we sit, we are in the process of amending the law, so that all employers, whatsoever, including CEOs who do not remit those contributions to be held accountable and to be punished from day one,” RBA chief executive officer Charles Machira said in a September 2025 interview.
The industry’s total unremitted contributions stood at Sh72 billion as of June 2025. Out of this, 98 percent are linked to county governments and quasi-government institutions including cash-strapped public universities and sugar millers.
The retirement industry regulator also plans to enlist the help of the Kenya Revenue Authority (KRA) in its quest to collect the unremitted pension deductions.
