Members of County Assemblies (MCAs) will now be required to pay full Tier II contributions to the National Social Security Fund (NSSF), just like other public employees, following a key amendment to the proposed County Assembly Pension Scheme Bill.
The Senate has removed a controversial clause in the original version of the Bill that sought to exempt MCAs and County Assembly Service Boards from making the higher-tier contributions under the NSSF Act, 2013.
The revised Bill, which has already been forwarded to the National Assembly for further consideration, obligates County Assembly Boards to match MCAs’ Tier II contributions fully, aligning them with the current national pension structure.
Initially introduced by Senate Majority Leader Aaron Cheruiyot in February 2024, the Bill aims to establish a dedicated pension scheme for MCAs while overseeing a smooth transition from existing retirement arrangements.
However, the exemption clause raised concerns over fairness and consistency in national social security compliance.
The NSSF Act, which took effect in February 2023 after lengthy legal delays, introduced a two-tier contribution model requiring both employers and employees to contribute 6% of wages under Tier I and Tier II.
Tier I is based on a lower earnings limit (currently Sh8,000), while Tier II covers the difference between the lower and upper earnings limits — the latter having recently doubled to Sh72,000.
With the Senate’s revision, MCAs will no longer have the option to redirect Tier II contributions into private pension schemes — a practice known as “opting out” — which has been the subject of disputes between private pension funds and the NSSF. The fund has insisted that opting out is not automatic and requires compliance with specific criteria.
In November, the Council of Governors (CoG) sought a blanket exemption from Tier II contributions for all county employees.
However, NSSF rejected the request, stating that each county must apply individually and clear any outstanding obligations before such a request can be considered.
“NSSF said each county must apply individually and settle any pending debts or obligations before being considered for exemption,” said CoG Chief Executive Mary Mwiti.