The Supreme Court has rejected a plea by over 6,000 pensioners to temporarily suspend the National Social Security Fund’s (NSSF) move to increase monthly deductions to Ksh2,160 pending the determination of their appeal.
In a ruling delivered on Friday, June 16, 2023, the apex court judges led by Chief Justice Martha Koome declined the request by Kenya Tea Growers Association, Agricultural Employers Association and County Pensioners Association to stop enforcement of a Court of Appeal judgment, which allowed the deductions.
While dismissing the application to stop deductions, the top court ruled the implementation of the new act has kicked off and the workers and pensioners have since complied with the appellate court's decision on the deductions.
Supreme Court ruling
Further, Koome, Deputy Chief Justice Philomena Mwilu and justices Mohammed Ibrahim, Smokin Wanjala and Isaac Lenaola ruled that the petitioners did not demonstrate to the court that in the event the appeal pending in court succeeds that the contributions made to NSSF would be lost or inaccessible to the contributors or their beneficiaries.
"Kenya Tea Growers Association and Agricultural Employers Association did not deny the NSSF Board Trustees' contention to the effect that their members had since complied with the Act. In particular, that they had registered and started making contributions to NSSF as envisaged under the Act," the apex court judges ruled.
"Likewise, none of the applicants denied the NSSF Board’s contention that following the disputed judgment that the Act has since been implemented. Besides, none of the applicants demonstrated that in the event the consolidated appeal succeeds that the contributions made to NSSF would be lost or inaccessible to the contributors or their beneficiaries," they ruled.
The NSSF Board of Trustees told the judges that members of the County Pensioners Association, Kenya Tea Growers Association and Agricultural Employers Association have since complied with the Act by registering and making contributions to NSSF.
The court heard that the reason the Kenya Tea Growers Association and Agricultural Employers Association oppose the implementation of the Act "is to enable their members to avoid registration and making contribution for seasonal/casual workers who comprise the largest percentage of their workforce".
But the pensioners sought the interim orders stopping the NSSF Board of Trustees, the Retirement Benefits Authority and the Federation of Kenya Employees (FKE) from effecting the deductions, the groups said implementation of the Act will cause "unimaginable and irreversible havoc on the pensions industry especially due to mass transfers of employees from superior private pension schemes to NSSF".
The petitioners through lawyer Muthomi Thiankolu want the top court in the country to set aside the decision of the appellant court dated February 3, 2023, and declare mandatory contributions to NSSF unconstitutional saying the matter was handled by the wrong court.
They challenge the decision on grounds that the Court of Appeal in its decision misinterpreted and misapplied various provisions of the Constitution when it allowed a ten-fold increase to Ksh2,068 in workers’ monthly contributions.
The disputed decision by Justices Hannah Okwengu, Mohamed Warsame and John Mativo has approved the NSSF Act of 2013, saying that it was subjected to public participation as required by the constitution.
This was after the bench of three judges overturned a judgment delivered last September by the Employment and Labour Relations Court, which found that the NSSF Act 2013 was unconstitutional and blocked the government's bid to increase workers’ monthly deductions.
Employers are expected to remit Ksh2,160 for all earners with a gross income of Ksh18,000 and above, half of which is a matchup by the employer for the employee contribution.