NAIROBI, Kenya – Kenyans’ voluntary savings in the National Social Security Fund (NSSF) slumped by nearly half in 2024 as workers grappled with sharply higher mandatory deductions.
Data from the Retirement Benefits Authority (RBA) shows that additional voluntary contributions (AVCs) dropped by 47 per cent, falling to Sh1.01 billion from Sh1.92 billion the previous year.
The regulator linked the decline to rising statutory contributions under the NSSF Act, which require employees to remit higher monthly amounts.
Since February 2023, NSSF deductions have climbed from a flat Sh200 per worker to a graduated structure pegged on income.
Contributions doubled to Sh2,160 in February 2024 and again to Sh4,320 in February 2025 for top earners. The ceiling is set to rise by 50 per cent in February 2026, reaching Sh6,480.
“While normal contributions from both parties showed strong growth, additional voluntary contributions and medical fund contributions declined, suggesting a shift in focus towards mandatory contributions,” RBA noted.
Currently, employees earning Sh30,000 contribute Sh1,800 monthly, while those on Sh50,000 pay Sh3,000. Salaries of Sh80,000 and above attract the maximum Sh4,320 deduction.
Employers are legally required to match their workers’ contributions, though part of the employer’s share can be directed to occupational or umbrella pension schemes with RBA approval.
Despite the strain on workers’ disposable income, the policy has more than doubled NSSF’s annual collections. In 2024, contributions surged to Sh59.1 billion, up from Sh25.3 billion a year earlier.
Overall pension savings grew 29 per cent to Sh263.4 billion, with the NSSF’s share rising to 22.4 per cent from 10.9 per cent, signalling a growing shift away from private schemes.
The changes follow the implementation of the long-contested NSSF Act, which was cleared by the courts in 2023.
The government has defended the reforms as critical to boosting retirement savings in a country where less than 20 per cent of workers have a pension plan.
However, critics argue the higher deductions are squeezing household budgets, discouraging voluntary saving, and leaving workers with little control over how their retirement money is invested.
