The Union of Trade Unions (Cotu) led by Atwoli has supported President William Ruto’s proposal to increase the retirement savings deduction from the current 200 shillings to 6 percent of an employee’s monthly salary.
Cotu General Secretary Francis Atwoli said the current rate of deduction for the National Social Security Fund (NSSF) is insufficient and is the lowest in the East African region.
“For example, a person (who) has worked for 30 years with a monthly deduction of 200 shillings will get 144,000 shillings at retirement, which is not sustainable and (keeps) them in poverty,” Mr Atwoli said. .
When implementing a monthly deduction of six percent, such a person, assuming he earns 50,000 shillings per month and has worked for the same amount of time, would earn 2.1 million shillings in retirement after paying the same amount as his employer.
While defending the increase, President Ruto said the current rate is too low to be able to make savings that can provide a better life for retired workers, making it his favorite project right after he was sworn in.
According to Dr Ruto, Kenya is a big country below its weight, citing the biggest savings account in neighboring Uganda and Tanzania, both of which have smaller savings than Kenya.
“We would like to inform all Kenyan workers and Kenyans in general that we fully support the increase of the NSSF deduction from the current rate of Sh200 to the rate of 6% as defined in the NSSF Act,” said Mr Atwoli.
“Cotu is guided by the logic that, in proposing the NSSF law which is friendly to workers, Cotu must fight and defend the expansion of social security and pensioners’ benefits, first of all equally to increase the scope to include the solar sector (informal sector). and second, to vertically increase the level to realize the adequacy of retirement benefits,” Mr. Atwoli added.
He explained that Cotu requested a court order in 2014 to suspend the implementation of the NSSF law that provided a six percent deduction because they were not represented on the NSSF board and did not have a management guarantor to supervise the implementation of those laws. .
However, he called on Kenyan workers to fully embrace the proposed rate, saying it is in accordance with the law and also has great benefits in retirement.