Kenya's voluntary NSSF contributions drop by 47 per cent to Sh1 billion
Data from the Retirement Benefits Authority (RBA) shows that members’ additional voluntary contributions fell by Sh906.7 million in 2024, declining to Sh1.01 billion from Sh1.92 billion the previous year.
The number of Kenyans’ savings in the National Social Security Fund (NSSF) dropped by 47 per cent from Sh1.9 billion to Sh1 billion as employees faced rising mandatory monthly deductions of up to Sh4,320.
Data from the Retirement Benefits Authority (RBA) shows that members’ additional voluntary contributions fell by Sh906.7 million in 2024, declining to Sh1.01 billion from Sh1.92 billion the previous year.
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Employees normally contribute an agreed portion of their wages to employer occupational pension schemes, but are legally allowed to make higher deductions above the set threshold. These additional voluntary contributions (AVC) have now shrunk amid the rising mandatory NSSF deductions.
The industry regulator attributed the decline in voluntary top-ups to higher NSSF contributions, which currently reach a maximum of Sh4,320 for top earners. Employees have faced increased NSSF contributions since February 2023, when the National Social Security Fund Act 2013 was cleared by the courts for implementation.
“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 said.
The initial implementation saw monthly deductions rise from a flat Sh200 per employee to Sh1,080 in February 2023. The rates doubled to a ceiling of Sh2,160 in February 2024 before doubling again in February 2025 to Sh4,320 per month. Mandatory contributions are expected to grow again in February 2026 by 50 per cent, reaching a maximum of Sh6,480.
Employees earning Sh30,000 per month currently pay Sh1,800 to the NSSF, while those earning Sh50,000 contribute Sh3,000. Kenyans on Sh80,000 and above pay the maximum Sh4,320 in mandatory deductions.
Employers are required to match their workers’ contributions. For top earners, this means remitting Sh480 to the NSSF, while the remaining Sh3,840 can be paid into the employer’s occupational or umbrella pension scheme. Employers wishing to contract out of the NSSF must obtain prior approval from the RBA.
Meanwhile, total pension savings in the NSSF more than doubled in 2024, following the implementation of higher mandatory contributions.
Contributions to the statutory scheme rose to Sh59.1 billion from Sh25.3 billion the previous year, as the second instalment of the graduated increase in mandatory deductions took effect.
Overall pension contributions rose 29 per cent to Sh263.4 billion in 2024, up from Sh204.9 billion the previous year. The NSSF portion of total contributions increased to 22.4 per cent from 10.9 per cent, suggesting the statutory scheme is now taking a larger share of total pension savings at the expense of private schemes.
“Total contributions rose significantly in 2024, largely driven by increased employer and member contributions following the implementation of enhanced NSSF rates,” RBA said.
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