Atwoli backs proposed pension plan

The Central Organisation of Trade Union’s has backed the proposed Pensions Bill that will see workers contribute 12 percent of their minimum pay to a national pension scheme.

Cotu secretary-general Francis Atwoli said that the law proposing workers to contribute a larger amount to the National Social security Fund (NSSF) was long overdue.

“The Bill is pertinent as it will be responsive to the needs of workers in old age,” he said. (READ: Workers, firms to remit 12pc pay to NSSF)

Mr Atwoli was speaking after meeting NSSF’s board of Trustees, who had been collecting views from the public and stakeholders on the proposed Bill.

Workers in other schemes

The new scheme would make it mandatory for workers, who do not belong to other pension schemes, to contribute 12 percent of their gross pay to NSSF, in a first tier arrangement.

The 350,000 Kenyans who belong to an employer pension scheme, will pay at least six percent of their monthly earnings to NSSF, in what the board says is meant to encourage a savings culture among Kenyans.

Currently, more than one million NSSF contributors, give out Sh400 per month to NSSF, which is too little as it amounts to the contributor getting Sh450,000 lump sum after 30 years of contributing.

NSSF chairman Adan Mohammed, expressing optimism the proposal would work, said the new Bill would transform the national pension scheme from a provident fund to a social security fund.