Social Security

Social Security and Pension in Kenya for workers, employees and employers on including social security benefits, pension, and payout

Social security in Kenya is regulated and provided for under a plethora of laws- the Retirement Benefits Act, 1997, the Retirement Benefits (Amendment) Act, 1998, the National Social Security Fund Act, the National Health Insurance Fund Act, the Pension Act and the Pensions (Increase) Act. The Pensions Act, Cap 189 Rev. 2009, provides for the grant and regulating of pensions, gratuities and other allowances in respect of the public service of officers under the Government of Kenya.

What is the current situation in Kenya?

Social security in Kenya is currently regulated and provided for under many laws. The National Social Security Fund (NSSF) is the largest social security scheme covering almost all of the formal labour force. NSSF is a state-administered provident fund though the government ensures that every worker is provided with minimum social security protection.

The Act requires all employers to register with the fund and remit statutory contributions on a monthly basis.

Other schemes include the Retirement Benefits scheme, the Retirement Benefits (Amendment in 1998) scheme, the National Health Insurance Fund, the Pensions scheme and the Pensions (Increase) scheme.

What are the benefits of social security?

The benefits of social security schemes include age benefits, survivor’s benefit, invalidity benefit, withdrawal benefit, emigration grant, and such other benefits as may be prescribed by the Minister.

How does the social security system work?

The government administers the National Social Security Fund and the National Health Insurance Fund (NHIF). In addition there are private retirement benefits schemes governed by the Retirement Benefits Act, 1997 through which private employers and their employees as members make contributions towards retirement. A Retirement Benefits Authority was established for the regulation, supervision and promotion of retirement benefits scheme, which have been largely taken up by formal employers and workers.

What is a retirement benefits scheme?

Retirement benefits schemes are defined as any scheme or arrangement (other than a contract for life assurance), whether established by a written law or by any other instrument, under which persons are entitled to benefits in the form of payments, determined by age, length of service, amount of earnings or otherwise and payable primarily upon retirement, or upon death, termination of service, or upon the occurrence of such other event as may be specified.

Does the law allow for employees to be included in pension schemes?

Section 9 and 10 of the Employment Act, 2007, specifies that an employee shall be employed under a contract of service which shall include pensions and pension schemes in which the employee is involved (section 10 (3) (iii)). This means that the law allows for employees to be included in pension schemes.

Can my family benefit from my pension in case I die as an employee?

Yes, Section 17 of The Pensions Act, provides for payment of pension benefits to dependents upon death of the employee in service or on retirement, on condition that the employee has worked in for ten or more years’ service.

In case of formal workers, paragraph 19 of Payments of benefits to a nominated beneficiary, subsidiary to Retirement Benefits Act, the rules provide that on the death of a member the lump-sum benefits payable from the scheme shall be paid to the nominated beneficiary, and if the deceased member has not named a beneficiary then the trustees shall exercise their discretion in the distribution of the benefits to the dependents of the deceased member:

In case I am terminated from employment how can I benefit from the pension scheme?

Kenya does not offer unemployment benefits, but there are circumstances in which pensions may be granted in case of termination of employment. Section 6 (1) (f) of Pensions Act, grants payment of pension, gratuity or other allowance, in case of termination of employment in the public interest.

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