COTU: Private Pension Firms Engaged in Campaign to Undermine NSSF
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The Central Organization of Trade Unions (Kenya), COTU (K), has launched a defense of the National Social Security Fund (NSSF), accusing players in Kenya’s private pension industry of conducting a deliberate campaign of misinformation aimed at misleading workers and frustrating the growth of the national social protection institution.
In a statement signed by Secretary General Dr. Francis Atwoli, the workers’ umbrella body said it had become aware of efforts by certain stakeholders within the private pension sector to spread fear and confusion regarding the implementation of the NSSF Act, 2013.
“It has come to the attention of the Central Organization of Trade Unions (Kenya), COTU (K) that certain players within Kenya’s private pension industry are engaged in a deliberate campaign of misinformation, skulduggery, and fearmongering aimed at misleading workers, undermining the National Social Security Fund (NSSF) and frustrating its growth into a strong and competitive national social protection institution,” the statement said.
COTU Claims Opposition Driven by Commercial Interests
COTU maintained that the resistance to the implementation of the NSSF Act, 2013 was not motivated by concern for workers but by business interests seeking to preserve dominance over retirement savings.
“As the umbrella workers body, COTU (K) has reason to believe that most of the noise currently being generated around the implementation of the NSSF Act of 2013 are not motivated by concern for workers, the sole beneficiary of the enhanced benefits, but by the commercial interests of some private insurance schemes determined to preserve their long-standing dominance over workers’ retirement savings,” the union stated.
The organization further argued that private pension providers had become increasingly uncomfortable with the emergence of a stronger and better-regulated NSSF capable of competing effectively for the confidence of Kenyan workers.
“For starters, the principle that every worker should be covered by a national social security scheme is not new. It dates back to the establishment of NSSF in 1965 when the Government of Kenya, under the leadership of President Mzee Jomo Kenyatta and with the support of progressive leaders including then Minister responsible for Cooperative Development, the late Hon. Masinde Muliro, embraced the principle that workers should be protected against old-age poverty through a national social security system,” COTU said.
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Warning to Pension Providers and Industry Leaders
The trade union movement also issued a warning to private pension providers and umbrella organizations within the sector, particularly the Association of Pension Trustees and Administrators of Kenya (APTAK).
“As COTU (K), we therefore wish to caution aggrieved private pension providers and their umbrella organizations, including those operating under the Association of Pension Trustees and Administrators of Kenya (APTAK) led by their Secretary General Boniface Mwangangi, against deliberately causing confusion in the pension industry regarding the role of NSSF, the status of the NSSF Act, and the implications of the recent Court of Appeal developments,” the statement read.
“If these misleading campaigns persist, COTU (K) will have no hesitation in exposing the anti-worker positions, contradictions, and commercial interests that underpin such efforts,” it added.
The workers’ body also criticized the Agricultural Employers Association (AEA) for allegedly directing members to abandon the enhanced NSSF contribution framework.
“At the same time, COTU (K) finds it dishonest and unfortunate that the Agricultural Employers Association (AEA), an organization representing employers in the agricultural sector, moved with remarkable speed to issue a circular directing its members to abandon the enhanced NSSF contribution framework and revert workers to the obsolete Ksh 200 contribution regime,” COTU stated.
NSSF Returns Highlighted as Success Story
COTU said workers should embrace Tier II contributions, citing recent investment performance by the Fund.
“As COTU (K), we represent workers in the NSSF Board of Trustees and we have not shied away from encouraging workers to embrace the Tier II contributions, considering the fact that NSSF has recently been recording some of the strongest investment returns in its history, declaring returns of approximately 11 percent in the 2023/2024 financial year and 17 percent in the 2024/2025 financial year,” the statement said.
“These are returns that many pension schemes would envy,” it added.
The union also condemned what it described as a coordinated campaign by private retirement schemes to portray NSSF as a threat to retirement security.
“While COTU (K) is not opposed to the operations of Private Insurance Schemes, we shall not remain silent when they engage in a deliberate and coordinated plan with the intent of misleading workers into believing that the existence and performance of NSSF threatens retirement security,” the statement said.
Constitutional Duty to Provide Social Security
COTU further emphasized that the State remains constitutionally obligated to provide social security regardless of the existence of private pension schemes.
“In fact, as COTU (K) we are alive to the fact that even if every private pension scheme in Kenya were to cease operations tomorrow, the State would still retain a constitutional obligation to provide social security,” the union stated.
“Article 43 of the Constitution expressly guarantees every person the right to social security. This responsibility cannot be outsourced, privatized, or abandoned as social security is fundamentally a public function of the State and private pension schemes are supplementary mechanisms that should not attempt to portray themselves as substitutes for the national social security system,” COTU added.
The organization concluded by highlighting its support for NSSF and its commitment to protecting workers’ retirement savings.
“Finally, COTU (K) reiterates that the retirement savings of workers belong to workers and not to private pension interests or financial intermediaries, and we shall continue to defend the NSSF as a critical pillar of social protection, fight attempts to weaken workers’ retirement security, and champion reforms that guarantee dignity in old age for every Kenyan worker,” the statement concluded.
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The interior part of the NSSF building office
PHOTO/File