The New NSSF Limits Don’t Have to Be a Burden
The recent change in Kenya’s NSSF contributions—raising the limits for Tier I and Tier II—has left many HR and finance teams scratching their heads.
For most employers, this feels like an extra cost to bear.
But what if we told you this isn’t just a burden—it’s a smart opportunity to build your employee benefits strategy, attract great talent, and manage your long-term payroll budget wisely?
Let’s unpack this.
What’s Changed?
Under the NSSF Act 2013 (yes, it’s finally being enforced in full), the earnings ceiling for pension contributions has now increased from KES 18,000 to KES 72,000 monthly. What does this mean for employers?
Each month, previously both the employer and employee contributed 6% of the employee’s gross salary, up to a maximum of KES 720 each—making it a total of KES 1,440 per employee per month. It now increased to KES 3,840 each — making it a total of KES 7,680 per month.
This contribution limit is expected to increase again next year, meaning your payroll costs will keep rising unless you explore more strategic options.
That’s quite the jump, especially for businesses with lean budgets.
But here’s the smart part: employers are allowed to opt out of Tier II contributions and set up a Private Occupational Retirement Benefits Scheme—a custom pension plan for your employees, registered and regulated by the Retirement Benefits Authority (RBA).
Why More Kenyan Employers Are Opting Out of Tier II
Higher Returns for Employees
Private pension providers often post stronger returns than NSSF. This means your employees’ retirement savings grow faster—with the same monthly contribution.
For example, RBA data shows that pension providers such as CPF Financial Services and Britam Asset Managers recorded returns of over 10% in 2023 — outperforming the standard NSSF rates significantly.
(Source: RBA Industry Performance Report)
This means your employees’ retirement savings can grow faster with the same monthly contribution, making private pension schemes an attractive option.
Makes You a Talent Magnet
In Kenya’s job market, people aren’t just chasing a salary—they’re chasing security. If you offer better retirement options, your team stays longer, and great talent sees you as a dream employer.
(Just ask our clients who’ve built retention through employee incentive programs 👌🏽.)
Flexibility on Your Terms
You decide how the scheme works—whether it includes early access options, specific investment choices, or staff education. It’s your business, your team, your plan.
Better Long-Term Planning
Let’s simplify this one: NSSF doesn’t give you much say in how the money is used. But with your own scheme, you and your financial advisors can structure things in a way that fits your business model and your employees’ needs.
How Dawit Insurance Helps You Navigate All This
At Dawit, we don’t just hand you a brochure and disappear.
We:
- Facilitating the application process for the Tier II opt-out approval from RBA
- Connect you with top-performing, compliant retirement schemes
- Help onboard your staff so they understand and appreciate the switch
- Provide ongoing support so your pension plan continues to serve both your business and your team
Ken (our CEO) says it best:
“If policy changes are a storm, Dawit is your umbrella. We don’t just keep you dry—we show you how to turn that storm into rain that grows your business.”
Still Thinking This Is Just an HR Task?
Think again.
This is a leadership decision—not just a payroll line item. It impacts your brand, your retention strategy, and how investors see your long-term planning.
And here’s the truth: your competitors are already making moves. The question is, will you?
📞 Let’s Turn This Into Your Strategic Win
Speak to Norah, our Employee Benefits Advisor, for a no-pressure consultation on how to make the most of these changes.
📱 Call: 0712856447
💬 WhatsApp | 📅 Schedule a Meeting | 📄 Request a Review
Let’s protect your people, build trust, and turn a policy shift into a competitive advantage.
