President William Ruto has lauded the increased contributions to the National Social Security Fund (NSSF) as a crucial step towards enhancing the nation’s financial security. In 2023, Ruto’s administration implemented amendments that introduced higher contribution rates to the state-owned pension scheme and expanded the contribution base to include workers in the informal sector.

On Wednesday, President Ruto stated that by the end of 2025, Kenya is projected to double its savings compared to the last 60 years, thanks to contributions made over the past three years. "By 2027, we will have saved Ksh.1 trillion. All this is because we have made bold decisions," Ruto remarked at the Cooperative University of Kenya in Karen, Nairobi. "Many people don’t believe what I'm saying, but you will be shocked. That is how to transform a nation, and I am going to confound the naysayers."

Ruto emphasized that Kenya had previously lagged behind smaller neighbouring economies like Uganda and Tanzania in terms of pension contributions until his government made “the right decision” to increase monthly NSSF deductions. He questioned the adequacy of saving Ksh.200 monthly and highlighted that Uganda and Tanzania have larger social security funds despite having smaller economies due to their proactive decisions.

In the preceding year, NSSF transitioned to a tiered contribution system, replacing the former flat-rate contributions. Tier I contributions are designated for pensionable earnings up to the lower earnings limit (Ksh.7,000 monthly), while Tier II contributions apply to earnings exceeding that limit. While Tier I contributions are directly remitted to the NSSF, employers had the option to direct Tier II contributions to a contracted-out or set-up scheme. Employees contribute six per cent of their monthly gross pay to the fund, with employers matching the contribution.

In 2024, the maximum deduction was Ksh.2,160 from both the employee and employer, totaling Ksh.4,320. However, starting from February 2025, the employee’s maximum deduction increased to Ksh.4,320, with a matching employer contribution, resulting in a total of Ksh.8,640.

Recent data from the Retirement Benefits Authority (RBA) indicates that Kenyans’ contributions to pension schemes have nearly doubled since 2022. Pension contributions over the last three years have surged from Ksh.62.73 billion for the half year ending June 2022 to Ksh.118.80 billion for the half ending December 2024. For the six months ending in December 2022, pension contributions amounted to Ksh.70.26 billion, subsequently rising to Ksh.83.14 billion in the half-year up to June 2023 and further to Ksh.105.65 in the second half of 2023. Last year, Kenyans contributed Ksh.116.10 billion in the first year-half, before increasing it to Ksh.118.80 billion in the second half.