The Federation of Kenya Employers (FKE) has advised employers to continue deducting and remitting enhanced National Social Security Fund (NSSF) contributions under the NSSF Act, 2013, despite a recent Court of Appeal ruling declining to suspend a judgment that declared the law unconstitutional.
In a statement issued on June 12, FKE said employers should maintain the current contribution rates until the legal dispute is conclusively determined, warning that reverting to the previous Sh200 monthly deductions could create fresh legal and administrative complications.
"FKE advises members that since the matter has not been conclusively determined in the Court of Appeal, it would be prudent for them to continue deducting and remitting the new rates prescribed by the NSSF Act, 2013," the employers’ body said.
The guidance follows a May 29 Court of Appeal decision dismissing NSSF's application for stay orders that would have suspended an Employment and Labour Relations Court (ELRC) judgment declaring the NSSF Act, 2013, unconstitutional.
In its ruling, the appellate court acknowledged that NSSF had raised arguable grounds in its intended appeal, including whether the Act was wrongly classified as social assistance rather than a contribution-based pension scheme and whether Senate participation was required during its enactment.
However, the judges held that arguability alone was insufficient. Under Rule 5(2)(b), NSSF was required to demonstrate that failure to grant a stay would render its appeal nugatory, a burden the court found it had failed to meet.
The court sharply criticised NSSF for making sweeping claims about potential chaos in the pensions sector without providing evidence.
NSSF had argued that failure to suspend the judgment would destabilise pension operations, affect over 580,000 informal-sector contributors under the Haba na Haba scheme, and jeopardise billions of shillings in contributions.
But the judges noted that the Fund failed to present audited financial statements, actuarial reports, or other empirical data to support those assertions.
"Bare assertions could not satisfy the stringent nugatory test," the court observed, noting that NSSF contributions had been collected under the previous legal framework for years without evidence of governance failures or collapse of the pension system.
Despite the ruling, NSSF has maintained that the 2013 Act remains operational pending the determination of its appeal and has directed employers to continue remitting contributions at the enhanced rates currently in force. FKE has now backed that position while urging the Court of Appeal to provide clarity on the contentious matter.
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