NSSF Act, Explained
What is the NSSF Act 2013
The NSSF Act 2013 was passed by the National Assembly in December 2013 to replace the NSSF Act Cap 258 0f 1965. It was not fully implemented until February 2023 when the Court of Appeal declared the Act constitutional and directed its implementation with immediate effect.
The Act requires that both the employer and employees increase their NSSF contributions from the initial Ksh. 200 per month to 6% of pensionable salary (subject to certain salary maximums). These contributions will be on a graduated scale referred to as tiers.
New NSSF Contributions
Tier 1 Contributions
These are calculated on the pensionable earnings up to a maximum referred to as the Lower Earnings Limit (LEL). The Tier 1 contributions shall be credited to the Tier 1 Account.
The maximum Tier 1 contribution is 6% of the LEL.
Tier 2 Contributions
Tier 2 contributions are calculated on pensionable earnings between the Lower Earnings Limit (LEL) and the Upper Earnings Limit (UEL) and shall bill credited into Tier 2 Account.
The maximum Tier 2 contribution is 6% of (UEL – LEL)
The Lower Earnings Limit and the Upper Earnings Limit are determined per the table below.
Year | Lower Earnings Limit (LEL) | Upper Earnings Limit (UEL) | Year | Tier I Contribution | Maximum Tier II Contribution |
1 | 6000 | 50% of the National Average Earnings | 2023 | 360 | 720 |
2 | 7000 | 1 times the National Average Earnings | 2024 | 420 | 1,740 |
3 | 8000 | 2 times the National Average Earnings | 2025 | 480 | 3,840 |
4 | 9000 | 3 times the National Average Earnings | 2026 | 540* | 5,940* |
5 Onwards | Lower Earnings Limit as provided in regulation 2(a) of this Schedule | 4 times the National Average Earnings | 2027 | 8,640* |
*The contributions for 2026 and 2027 are estimates. Please note they might change.
The contributions illustrated here are the employees’ contributions. The employer will match them.
How do you make the contributions?
Tier 1 Contributions: Tier 1 contributions MUST BE remitted to NSSF.
Tier 2 Contributions: Tier 2 contributions can be remitted to NSSF or a retirement benefits scheme approved by the Retirement Benefits Authority (RBA), such as the Zimele Guaranteed Personal Pension Plan. This is referred to as contracting out.
What is the process of contracting out to Zimele?
Step 1: Download the relevant forms and documents at employers.zimele.co.ke/join
Step 2: Fill out the forms and submit to employers.zimele.co.ke/join
Step 3: We will handle the rest and notify you once we get the approval from RBA.
Step 4 Once approved to contract out, you can start remitting your contributions to Zimele.
If you would like to send your Tier 2 contributions to Zimele, we can help you with the contracting out process by clicking the button below.
Why Zimele? Take a look at our historical returns.
| Year | Zimele Personal Pension Plan | Zimele Guaranteed Pension Plan | Inflation Rate |
|---|---|---|---|
|
2024 |
25.1% |
11.3% |
4.5% |
|
2023 |
4.95% |
11.2% |
7.7% |
|
2022 |
9.9% |
11.3% |
7.6% |
|
2021 |
10.3% |
12.5% |
6.1% |
|
2020 |
7.4% |
11.4% |
5.3% |
|
2019 |
13.8% |
15.2% |
5.2% |
|
2018 |
11.7% |
13.6% |
4.7% |
|
2017 |
14.7% |
14.3% |
8.0% |
|
2016 |
6.6% |
12.0% |
6.3% |
|
2015 |
8.6% |
24.6% |
6.6% |
|
2014 |
15.7% |
11.7% |
6.9% |
|
2013 |
5.2% |
12.0% |
5.7% |
|
2012 |
17.1% |
13.3% |
9.4% |
|
2011 |
17.2% |
14.5% |
14.0% |
|
2010 |
37.6% |
8.5% |
4.1% |
|
2009 |
2.9% |
N/A |
10.5% |
|
2008 |
-19.9% |
N/A |
10.5% |
|
2007 |
-0.5% |
N/A |
4.3% |
|
Average |
9.9% |
13.5% |
7.5% |
Resources
Learn all the basics of the NSSF Act by clicking here.
The Zimele Pension Plans have been registered to receive Tier II contributions in accordance with the provisions of the NSSF Act No. 45 of 2013.Learn more by clicking here.