Labour minister now roots for alternative pension schemes

Labour Cabinet Secretary Florence Bore.She says this will help bridge the gap between NSSF members who also contribute to other schemes. [Peter Ochieng, Standard]

Labour Cabinet Secretary Florence Bore is pushing for firms to enrol their employees on alternative pension schemes besides the National Social Security Fund (NSSF), which is a statutory contribution.

The CS said this would bridge the gap between NSSF members who are contributing to other schemes and those with no alternative needs.

Ms Bore, while addressing chief executive officers at the inaugural of their association in Nairobi yesterday, pointed out the important role company bosses play in social protection matters.

The CS said out of the 2.6 million members contributing to the NSSF, less than 450,000 have supplementary pension arrangements.

These are occupational and umbrella schemes.

“As CEOs, you have a task to provide the requisite leadership by championing initiatives to bridge this gap,” she said.

The CS's comments come at a time when the implementation of the NSSF Act, 2013 is poised to expose stakeholders in the labour market to legal landmines.

According to the Act, an employee is expected to contribute six per cent of their salaries to NSSF and another six per cent to be matched by their employer.

The new rates have divided opinion among human resource practitioners, administrators, and fund managers, among other players, setting the stage for potential legal battles, with employers already having opposed the move. 

The NSSF Act provides for two levels of contributions: Tier I and II. Tier I is calculated at six per cent of the minimum wage, which is Sh6,000 while Tier II is six per cent of the difference between the minimum wage and the upper earning limit, which is Sh18,000.

The upper earning limit is set to be adjusted annually. This will have a compounding effect on both the employee and the employer.

The CS said her ministry plays a pivotal role in pro-poor and vulnerable population programmes where a majority of them are yet to be covered by social protection schemes.

“As CEOs, you have a role in providing leadership with a lens on these groups through targeted Corporate Social Responsibilities,” she added.

The forum was attended by a section of CEOs drawn from the business, not-for-profit and public sector organisations who came together to form the CEOs association.

Founding chairperson of the association Rogers Odima said the body, unlike others, is not a lobby group but will endeavour to work in partnership with the government.

The association will be a platform for CEOs to network, and provide mentorship to others considering most members are Small and Medium Enterprises.

It has 190 members so far. 

“We want to create collaborations and opportunities through networking. We can become markets to each other,” said Odima.

He said the association looks forward to a collaborative engagement with the government to create an enabling environment in the labour market.

“We want to partner with the government as friends and tell them this is the way you can influence policies for the good of the business," said Odima.