In a statement to newsrooms on Tuesday, COTU boss Francis Atwoli called on Kenyans to fully embrace the 6% rate claiming that it will “benefit workers upon retirement”.
“We fully support the increment in NSSF deductions from the current Ksh.200 to the 6% rate as captured in the NSSF Act,” reads part of the statement.
“We call upon Kenyan workers to fully embrace the 6% rate as it is within the law and also of great benefit to them upon retirement. It is to the benefit of workers that the 6% rate is implemented forthwith.”
He further termed the current deduction as “critically inadequate” and that the increase he been long overdue.
“Indeed, this increase has been long overdue considering it is not just the lowest in the East Africa region but also has been COTU’s view that the current deductions are critically inadequate,” said Atwoli.
Explaining how the deductions would benefit workers after retirement, Atwoli noted that one will be able to save up more and enjoy an equitable amount in their old age.
“For instance, a worker who has worked for 30 years being deducted Ksh.200 monthly can only take home Ksh.144,000 (subject to inflation) upon retirement. Such an amount ultimately leaves retirees exposed to old-age poverty,” he said.
“On the other hand, a worker earning 50,000 a month and having worked for 30 years being deducted 6% with an equal top-up from the employer will take home Ksh.2.1 million (subject to inflation) upon retirement.”
In his plan to have a horizontal inclusion of the informal sector as voluntary contributors and a vertical increment of the NSSF contribution rate, President Ruto said that the Ksh.200 was too little to benefit anyone in their old age.
The increment proposal has however sparked a raging debate as most Kenyans have decried that they will have more pain on salaried workers given the biting economic times.
