CIC Life Assurance gets nod to handle NSSF contributions
CIC Group chief executive officer Patrick Nyaga (right) with chief financial officer Philip Kimani during the release of the insurer's 2022 financial results on March 22, 2023. PHOTO | POOL
“In line with our mission to enable people to achieve financial security, we are committed to assisting all eligible employers with the opt-out process for tier II contributions and secure their employees' retirement,” said CIC Life Assurance.
The underwriter joins the growing list of private pension providers with regulatory approvals to manage the graduated contributions.
Other entities that have received RBA’s approval so far include Octagon Africa, Enwealth Financial Services, Britam, CPF Financial Services, Zimele and Old Mutual.
An employer may choose to pay their tier II contributions to a private pension scheme while tier I contributions must be remitted to the NSSF.
Qualifying private pension schemes are issued with a reference scheme certificate by the RBA, which proves the scheme’s compliance to RBA regulations.
Like the private pension schemes, employers are required to have the regulator’s greenlight to opt out of making the tier II contributions to the NSSF by issuing a 60 days’ notice to the RBA requesting for approval.
Monthly contributions of Sh360 –which are matched by the employer— must be paid to NSSF and applies to earnings of up to Sh6,000 per month.
Monthly salaries of up to Sh18,000 require an employee to pay an extra Sh720, which is also matched by the employer.
The extra contributions can be paid to the State-controlled pension fund or to private schemes. This is the first year of implementation of higher contributions to the NSSF.
