NSSF – Elimu Pedia https://elimupedia.com Number One portal for matters education, How to, TSC,KUCCPS, HELB,KRA , Top 10 bests,and Parenting. Thu, 27 Jul 2023 05:13:52 +0000 en-US hourly 1 https://wordpress.org/?v=6.0.9 This is Why Teachers Will Not be Saved From the Just Introduced NSSF Deductions Despite Existing Provident Fund https://elimupedia.com/this-is-why-teachers-will-not-be-saved-from-the-just-introduced-nssf-deductions-despite-existing-provident-fund.html Thu, 27 Jul 2023 05:13:52 +0000 https://elimupedia.com/?p=13373 This is Why Teachers Will Not be Saved From the Just Introduced NSSF Deductions

Teachers employed by Teachers Service Commission (TSC)are still recovering from confusion after a raft of deductions was made on their July pay slips.

The Commission has activated its T-Pay portal and teachers are now accessing their payslips online.

Already a good number of teachers have received their July salaries with banks like Equity,KCB. Cooperative and Absa paying by today.

However, what is evident is that teachers are for the first time are seeing a National Social Security Fund (NSSF) deducted in their pay.

Intern teachers in primary and junior secondary schools were also not spared. Around one thousand shillings was deducted after the newly introduced deductions were made.

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Though some teachers received their salaries with the annual increment and others with arrears the deductions has shrunk the overall net pay significantly.

We asked some experts why are teachers subjected to two health insurance covers (NHIF and AON Minet) and now a NSSF deduction when they are already paying 7.5% of their basic pay for provident fund.

According to an NSSF official, it is a responsibility of every Kenyan citizen to contribute towards the NHIF cover as well as the NSSF fund.

Whether one will have an additional fund towards another social security or health cover its their own choice, he says.

The NSSF act was passed in 2013 by parliament way before the introduction of Provident fund making it mandatory for all employees to contribute Ksh.360 towards the scheme. It has since been battling a court case until 3rd February 2023 when the court ruled in its favour. The act is now a law and is being implemented by the government.

“Attention is drawn to Circular letter Ref. No.OP/CAB.1/BA dated 13th January,2021 from the Head of Public Service on implementation of the Public Service Superannuation Scheme (PSSS). In the circular under reference, clarification was made on the implementation of the PSSS and NSSF Acts,” reads a circular sent by the ministry of public service to all accounting officers.

“In addition,the Court of Appeal of Kenya dedlared that the National Social Security Fund (NSSF) Act No. 45 of 2013 is constitutional vide the ruling on 3rd February, 2023. This rulling made NSSF contributions mandatory for all employers and employees in the Public Service.

Further,Section 20 of the Act categorizes the employers and employees contributions into two tiers, namely Tier I and Tier II. All public servants are subject to Tier I mandatory contributions. This will require every employee to contribute Kenya Shillings three hundred and sixty (Ksh. 360) monthly while the employer contributes a similar amount (Kshs.360) for each employee. The Act requires all employers to deduct and remit monthly contribution to NSSF by the 9th day of every month,” continues the circular.

The purpose of this circular letter therefore, is to request you to ensure compliance with the provisions of the NSSF Act,2013 and contents of this circular with effect form 1st July,2023.

]]> Current pension scheme (PSPS) versus The new contributory pension scheme (PSSS) https://elimupedia.com/current-pension-scheme-psps-versus-the-new-contributory-pension-scheme-psss.html Wed, 09 Dec 2020 07:31:19 +0000 http://elimupedia.com/?p=1744 Current pension scheme (PSPS) versus The new contributory pension scheme (PSSS)
S/ No Current pension Scheme The new Contributory Scheme
1. Retirement benefits are paid on a set formula Retirement benefits are paid from the accrued contributions and investment income
2. Not  portable since accrued benefits are not transferrable Portable since accrued savings are transferrable
3. Pension Vesting period is 10 years and on attainment of 50 years of age Vesting period is 5 years with  no  age limit
4. There is no  employee participation Employees participate through representation in the Board of Trustees and Annual General Meetings
5. Payment of the benefits is from the Consolidated Fund. Payment shall be from the Fund
6. Pension commutation is limited to a ¼ of the accrued pension Pension commutation is limited to a 1/3 of the accumulated credit
7. Dependant pension payment is prescribed and paid only to a

widow and children

 Annuity is paid as per principal member preference.
8. Managed by the National Treasury Administered by a Board of Trustees and regulated by the Retirement Benefits Authority
9. The accrued retirement benefit cannot be accessed while in service, hence not applicable for personal development. Allows a member to access 40% of the accrued savings to purchase a residential house.

Members can  access their accumulated savings upon exit subject to the vesting period
10. Employee does not contribute Employee contributes  promoting a saving culture
11. Benefits are defined and cannot be enhanced Employee  can  enhance the benefits through additional voluntary contributions

 

Teachers and other civil servants should note the following about the new contributory pension scheme (PSSS), which will be rolled out with effect from January 1st 2021

  • Officers below 45 years will automatically join the Scheme w.e.f.  1st January, 2021.
  • Employees aged 45 years and above may opt to join the scheme by completing the option A window of three months with effect from 1st January 2021 is provided to exercise the option.
  • Employee who will not exercise the option shall remain in the Public Service Pension Scheme as provided for under the Pensions Act, Cap
  • Employees serving on Temporary Terms of service and contributing to NSSF will be automatically converted to Permanent and Pensionable terms of service and shall cease contributing to NSSF with effect from 1st January, Upon conversion of the terms of service they shall be processed in accordance to the three categories above.
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Quick Facts about the January Contributory Pension Scheme As WCPS Contribution Ends 

  • Members of the new contributory scheme shall complete beneficiary nomination
  • Contributions to WCPS shall automatically cease upon joining the new contributory The contributions to this scheme shall be refunded upon exit from service.
  • The current pension scheme shall be closed to new entrants with effect from 1st January,
  • Authorized Officers shall deduct 2% of the employees’ basic salary and remit the same to the fund by the 10th day of the subsequent Any delay to remit the contributions will attract penalties.
  • Employees joining the new contributory scheme shall be issued with a letter recognizing their period of service under the current pension The   benefits shall be accessed through the fund upon retirement.
  • Widows and Children’s Pension Scheme (WCPS) and NSSF contributions will cease immediately an employee joins the new contributory s
  • Employees aged below 45  years who are on   secondment to other government agencies shall automatically join   the new contributory scheme and contribute 2% of the basic salary based on salary scale of the seconding The government contribution of 15% of basic salary shall be remitted by the respective Agencies. Employees aged 45 years and above will exercise the option to join the PSSS. The 31%Pension contribution will automatically cease.
  • Employees whose services were transferred from the National to the County Government owing to devolution of functions will automatically join the scheme and contribute 2% of the basic salary.
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