Kenya Orient enlisted to manage NSSF Tier II contributions

By Phyllis MUCHOKI

Kenya Orient Life Assurance Limited has joined 84 private pension firms so far cleared to handle National Social Security Fund (NSSF) tier-II contributions. This is after the firm received approval by the Retirement Benefits Authority (RBA) to manage the contributions.

This nod comes following the amendment of the NSSF Act No. 45 of 2013 where Tier I contributions from both the employee and the employer capped at KES. 720 go to NSSF while the rest of the contributions above KES. 720 up to a maximum of KES. 1,440 categorised as Tier II are now being managed by authorized private schemes.

“This milestone marks a significant step towards our continued commitment to providing comprehensive retirement solutions with great returns to our clients,” said Kenya Orient Life Assurance Limited Principal Officer Jackson Muli.

In 2022, Kenya Orient Life Assurance was rated as the best pension scheme following a declared interest rate of 11 per cent and a three-year average interest rate of 10.33 per cent.

“We are happy to be joining other industry players in helping eligible employers with the opt-out process for tier II contributions. This regulatory approval further solidifies our position as a reliable pension provider,” he said.

Qualifying private pension schemes are issued with a reference scheme certificate by the RBA, which proves the scheme’s compliance with RBA regulations.

However, the Act gives employers an option to opt out of Tier II NSSF contributions provided they make their members’ remittances into a scheme certified by the RBA for the purposes of receiving these contributions.

Workers earning above Sh18,000 are divided into two levels of contributions – Tier I and Tier II with the former being with respect to pensionable earnings up to the lower limit of Sh6,000.

Tier II contributions are those in respect of pensionable earnings above the lower earnings limit.
The NSSF estimates that the higher contributions would unlock Sh18 billion in the 2023/24 financial year with the Tier I impact being Sh5.71 billion.

In June the regulator cleared Minet Kenya to grow its management portfolio to more than Sh180 billion in a similar arrangement.

Minet Kenya manages over 200 Employer Pension Funds with assets under administration of Sh180 billion and at least Sh3.5 billion in pension funds.