Kenyan workers will see bigger pension deductions starting next February. The National Social Security Fund is implementing the latest phase of its reforms, raising the income limits for mandatory contributions. The change uses a two-tier system where both employees and employers pay six percent.
The earnings cap for the basic Tier I will increase to nine thousand shillings. The higher Tier II cap jumps to one hundred eight thousand shillings. This means contributions will be calculated on a larger portion of an employee's salary.
For example, a person earning one hundred thousand shillings monthly will have their total deduction rise to six thousand shillings. Their employer will match that amount, making twelve thousand shillings saved for retirement each month. Higher earners will see the largest jump, with those making over two hundred thousand shillings facing a deduction of six thousand four hundred eighty shillings from their pay.
Employees earning less than fifty thousand shillings will not be affected. Those with private pension plans approved by the Retirement Benefits Authority might see a reduced impact. The increased flow of funds is strengthening the NSSF's overall assets, which recently reached over five hundred fifty-eight billion shillings. This shift occurs as many households are already managing tighter budgets.
The earnings cap for the basic Tier I will increase to nine thousand shillings. The higher Tier II cap jumps to one hundred eight thousand shillings. This means contributions will be calculated on a larger portion of an employee's salary.
For example, a person earning one hundred thousand shillings monthly will have their total deduction rise to six thousand shillings. Their employer will match that amount, making twelve thousand shillings saved for retirement each month. Higher earners will see the largest jump, with those making over two hundred thousand shillings facing a deduction of six thousand four hundred eighty shillings from their pay.
Employees earning less than fifty thousand shillings will not be affected. Those with private pension plans approved by the Retirement Benefits Authority might see a reduced impact. The increased flow of funds is strengthening the NSSF's overall assets, which recently reached over five hundred fifty-eight billion shillings. This shift occurs as many households are already managing tighter budgets.
