High Court declares mandatory contributions to NSSF unconstitutional

The High Court Monday issued orders declaring some sections of the National Social Security Fund Act of 2013 unconstitutional.

The court ruled in favour of petitioners who challenged the mandatory nature of registration and contributions to the fund despite having other schemes. They protested that the NSSF Act of 2013 does not provide for an automatic opt-out of the fund.

“An order is issued restraining the 1st and 2nd respondents from applying the NSSF Act of 2013 on petitioners members or any other employees who have adequate alternative pension or social security schemes unless they opt-in,” said a  three-judge bench

Judges Mathews Nduma, Hellen Wasilwa and Monica Mbaru cited the NSSF Act No.45 of 2013 which they ruled is null and void given that it has implications on county finances and that it ought to have been tabled before Senate prior to enactment.

“The Act is inconsistent with provisions of Article 10 of the constitution as read with section 3 of the Competition Act by giving the Fund a monopoly in the provision of pension and social security services in the country and to this extent, it is unconstitutional, null and void,” the court determined

The superior court judges also ruled that Section 29 of the NSSF Act No45 of 2013 which makes it mandatory to register and contribute to the fund and oblige employees who have adequate alternative pension or social security schemes to join is null and void.

“An order is issued prohibiting the government from compelling or requiring mandatory registration enrolment or listing of any employer or employee whether registered as a member or any retirement benefit scheme or not to register, enroll or list and contribute their earnings or any party thereof,” the judges ruled

  

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