Enwealth Gets RBA Nod to Receive NSSF Tier 2 Contributions

The Retirement Benefits Authority (RBA) has given Enwealth Umbrella Fund approval to handle Tier 2 NSSF contributions from firms who choose not to contribute to the state pension fund.

Weeks after the NSSF Act 2013 took effect, Enwealth Financial Services is one of the first pension administrators in the industry to receive approval.

The act allows employers to choose not to make Tier 2 NSSF contributions as long as they remit member payments to a plan that has been approved by the RBA to serve as the recipient of these contributions.

Many employers are anticipated to redirect the graduated contributions into private administration funds, which provide members with higher investment incomes thanks to more effective procedures, increased transparency in investment decision-making, and lower administrative costs.

Private sector returns have averaged double digits over the past decade.

“We are excited to receive this approval from the regulator, and look forward to working with employers who would like to channel Tier 2 contributions to our Umbrella Retirement Benefits Scheme to provide them with higher investment income and more transparency needed to manage their members’ savings proficiently,” Enwealth Financial Services CEO Simon Wafubwa said.

“At Enwealth, we have heavily invested in our technological infrastructure to ensure compliance with the NSSF Act and enable us to serve our higher number of clients effectively, send real-time member statements through the online portal, and efficiently process members’ payments,” he added.

The heightened NSSF contributions, which became effective in February of this year, are intended to increase the scope and sufficiency of pension coverage to ensure financial security for Kenyans as they age.

According to the specified deductions schedule, Tier 2 payments are set at 6 percent of the employee’s pensionable wages between the lower and upper earning limits.

In order to opt-out, employers must submit a written request to the Authority at least 60 days beforehand.