Can an employer opt out of NSSF Tier II, and where do NSSF disputes go?
National Social Security Fund Act, 2013 · sources read 5 Oct 2026
Yes for Tier II only. An employer can pay Tier II contributions into a private pension scheme approved and registered by the Retirement Benefits Authority (RBA), after asking RBA in writing at least 60 days ahead, but Tier I must still go to NSSF. Disputes over contributions, benefits, registration or dependants go to the Tribunal under the Retirement Benefits Act.
- How long
- RBA must reply to an opt-out request within 30 days
- Deadline
- Written request to RBA at least 60 days before opting out
- Where
- Retirement Benefits Authority (opt-out request); the Tribunal under the Retirement Benefits Act (disputes)
Steps
- The employer writes to RBA at least 60 days before opting out, giving the scheme details RBA asks for.
- RBA replies in writing within 30 days, approving or not, depending on whether the scheme passes the Reference Scheme Test. Once approved, the workers' Tier II credits move from NSSF to the scheme.
- For a dispute with NSSF over contributions, benefits, registration, dependants or cancellation, go to the Tribunal set up under the Retirement Benefits Act.
Watch out
- Only Tier II can be contracted out. Tier I contributions must still be paid to NSSF.
- The private scheme must keep a record of the Tier II money (Protected Rights) and pay it out under the same rules as NSSF Tier II benefits.
Who this covers
- Employers who participate in, set up or join a contracted-out pension scheme
- The scheme must be approved and registered by RBA to receive Tier II contributions
Official sources (1)
- National Social Security Fund Act, No. 45 of 2013 (Cap. 258) new.kenyalaw.org · read 5 Oct 2026