Ruto Defends NSSF Asset Growth as Legal Battle Over Higher Contributions Continues

Ruto Defends NSSF Asset Growth as Legal Battle Over Higher Contributions Continues

President William Ruto has defended the rapid growth of the National Social Security Fund (NSSF), saying reforms introduced by his administration have nearly doubled the fund’s asset base in less than three years, even as a legal dispute over increased mandatory contributions continues to generate uncertainty among employers and workers.

Speaking during a public engagement on Friday, President Ruto maintained that the expansion of the country’s largest pension fund demonstrates the success of ongoing reforms aimed at strengthening retirement savings for Kenyan workers. The Head of State argued that prudent management and policy changes have significantly enhanced the institution’s financial position.

“When I became the President, NSSF had Ksh312 billion. Today it has Ksh680 billion in just three years,” Ruto said, attributing the increase to reforms undertaken by his administration and what he described as strong leadership at the fund.

The President reiterated that the government’s long-term objective is to improve financial security for workers after retirement by increasing pension savings and ensuring the fund has sufficient resources to generate sustainable returns for contributors.

The remarks come at a time when the implementation of higher NSSF deductions remains the subject of an ongoing court battle that has left many employers and employees seeking clarity on the applicable contribution rates.

The dispute stems from a ruling by the Employment and Labour Relations Court (ELRC), which declared the implementation of enhanced deductions under the NSSF Act, 2013 unconstitutional. Following the judgment, questions emerged over whether monthly deductions should immediately revert to the previous statutory contribution of Ksh200.

After the ruling, NSSF filed an appeal seeking to overturn the decision while also requesting orders to suspend the judgment. However, the Court of Appeal declined to grant a stay, allowing the legal process to continue as the substantive appeal awaits determination.

The differing legal interpretations have created uncertainty across the employment sector.

While several employers have indicated they will continue making deductions in accordance with the provisions of the NSSF Act pending the conclusion of the appeal, some legal experts, including representatives from the Law Society of Kenya (LSK), have argued that contributions should revert to the previous rates until the matter is conclusively resolved.

The contested deductions were introduced under reforms intended to modernise Kenya’s pension system and increase retirement savings.

Under the current framework, employees earning up to Ksh9,000 contribute six per cent of their monthly earnings under Tier I, with employers matching the same amount. This translates to Ksh540 from both the employer and employee, resulting in a combined monthly contribution of Ksh1,080.

For employees earning above Ksh9,000, additional deductions are made under Tier II, with maximum contributions applying to salaries of up to Ksh108,000. At the highest level, both employers and employees contribute Ksh5,940 each under Tier II.

When combined with Tier I contributions, the total monthly contribution can reach Ksh12,960 per employee under the revised structure that took effect in February 2026.

Supporters of the reforms argue that increased pension savings will provide workers with greater financial stability after retirement while also enabling NSSF to invest more heavily in national development projects and other long-term investments.

Critics, however, have expressed concern over the higher deductions, arguing that they reduce workers’ disposable income at a time when many households continue to grapple with the rising cost of living. Employers have also raised concerns over the increased payroll costs associated with matching employee contributions.

Despite the ongoing legal contest, President Ruto maintained that strengthening pension savings remains a central pillar of his administration’s economic agenda, insisting that the remarkable growth in NSSF assets demonstrates the benefits of the reforms.

The final determination by the appellate courts is expected to provide definitive guidance on the legality of the enhanced contribution rates, a decision likely to have far-reaching implications for millions of Kenyan workers, employers and the country’s broader retirement savings framework.

ALSO READ: Junet Mohamed Urges Johnson Sakaja to Join ODM, Says Party Support Key to 2027 Nairobi Governor Race

Ruto Defends NSSF Asset Growth as Legal Battle Over Higher Contributions Continues