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Consult with the teachers’ unions before implementing any more NSSF deductions

Consult with the teachers’ unions before implementing any more NSSF deductions

In 1927, Kenya’s colonial government started paying pensions and other benefits to teachers and other public employees, first for Europeans and then for non-Europeans.

The present version of Kenya’s Pensions Act (Cap. 189) was enacted on January 1st, 1946. It has since undergone a lot of changes to reflect the evolving workdays and workplaces for employees.

The Pensions Act (Cap. 189) specifies guidelines for the distribution of pensions, gratuities, and other benefits to former public sector workers employed by the Kenyan government.

As compensation for the contributions they have made to the country over the course of many years of their working careers, officers in the public service are entitled to terminal benefits in accordance with their letters of appointment under the existing terms and conditions of service.

Even though they are not eligible for a pension since they occupy a pensionable post but have not yet been confirmed, non-pensionable officers contribute to the NSSF, which went into effect in 1966 for non-pensionable officers. Additionally, it is believed that the new NSSF initiative will provide protection for these personnel. The NSSF Act of 2013 states that this arrangement is made to help employees who don’t fit the criteria for a standard pension plan.

A provident fund is a retirement budget set up by the government in which retirees are given a lump sum payment. When employees engage in the plan, they make contributions to the budget, which the government then keeps in storage and maintains until retirees are ready to withdraw from it. Contributors (retirees) can withdraw the entire balance at once because the provident fund pays out in lump sums.

A provident fund is not the same as a pension account. A provident allotment is a retirement plan handled by the government, as opposed to an annuity, which is a retirement plan managed by the employer. Withdrawals from provident funds are allowed in certain situations. You may use the retirement reserves if you resign, retire, are fired, relocate abroad, or develop a medical condition that prevents you from working.

In Kenya, the provident fund gives 7.5 percent of both the employee’s and the employer’s basic wages. Providing lump sum payments and other comparable benefits to employees who leave their jobs due to early retirement, job changes, true retirement, or to the families of employees who pass away is the purpose of a provident fund in Kenya.

Before continuing to deduct from the NSSF, consult with the teachers’ unions.

Before submitting a claim for provident funds, impacted persons or their families check with their former employers to discover if they have been paying payments. then show identification to their neighbouring branches for more help.

Savings requirements are set by a provident fund, a government-run programme. In many developing countries, the plan offers lump sum payments and other related incentives to employees who leave their jobs or to their dependents in the event of their death.

The reserve benefits contributors by giving retirees a source of money that they can use anyway they see fit, including investing it or buying an annuity.

Also read: TSC: USSD Code Checking Provident Fund Contribution

The government’s attempt to force all teachers into the NSSF plan in 2015 was hotly opposed by teachers’ unions, with Knut arguing that doing so would be the same as putting instructors into a pension programme.

The case-related petitions 35 of 2014, 34 of 2014, 49 of 2014, and 50 of 2014 were submitted to the Employment and Labour Relations Court in Nairobi. Due to constitutional issues, the action was then suspended.

Knut’s suggestion that employers contribute 15% of base pay and people contribute 7.5% was first put up in 2015. Knut emphasised that no teachers’ funds, regardless of the percentage, should be transferred out of the NSSF in the name of a pension unless the employer and employee come to an agreement.

Later, the NSSF board of trustees filed an appeal against the lower court’s decision. The lower court’s ruling was overturned by the appellant’s court on February 3, 2023, allowing the fund to withhold the previously allocated monies from all employees.

Teachers were surprised by the NSSF cut at the end of July 2023. That which ran into opposition and was redirected for consideration and input from stakeholders. According to the current interpretation of the Pensions Act, Chapter 189, NSSF is an arrangement made for workers who are employed on a contract, whereas pension is made for workers who are employed under permanent and pensionable conditions. Having an employee subject to both of these arrangements is equivalent to having two separate arrangements.

In the aforementioned circumstances, teachers have not earned a pay increase for the previous six years. Teachers were incensed that there was no salary component for them in the TSC and Knut Comprehensive Bargaining Agreement, which covered the years 2021–2024. But at the same time, the housing charge was put in place at a 0.5% rate, the provident fund was raised to 7.5%, and NSSF deductions got underway.

Before continuing to take funds from the NSSF, the responsible parties should, in our opinion, consider involving teachers more through their elected representatives.

Teachers’ pay stubs are completely distorted. It might not be a good idea to touch the instructors’ pay stubs because living expenses are considerable. Conversation time.

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