The National Assembly has urged the National Social Security Fund (NSSF) to waive Sh102 million in penalties and interest tied to the late remittance of contributions from former MPs, making the waiver a condition for changes to the NSSF Act.
Members of Parliament argue that the penalties are unfair since the principal contributions have already been settled.
National Assembly Speaker Moses Wetang’ula directed NSSF Managing Trustee David Koross to consider cancelling the fines for Parliament, which had failed to remit Sh24.8 million in deductions from former MPs.
“There were unpaid dues of Sh24.8 million that had attracted interest of Sh102 million. I instructed the Clerk, who paid the principal of Sh24.8 million, and if you are looking for Sh102 million in penalties, it must be a quid pro quo,” Wetang’ula said.
“The law allows you to waive penalties and interest as we consider your legislative proposals. These are unfair penalties and interests. Can you, here now, give us a commitment that you will waive the penalties given that we paid the principal as a responsible institution?”
Addressing MPs during the 2026 Legislative Retreat in Naivasha, Koross explained that requests for penalty waivers are evaluated on an individual basis.
“Let me engage the Clerk; the answer is positive. It is an issue of formality that needs to be followed up on. It is doable, we will do it,” Koross said. Ugenya MP David Ochieng, chairing the NSSF session, emphasised that “before you bring amendments to Parliament, make sure you waive the penalties and interest.”
Koross also asked Parliament to amend the NSSF Act, 2013, to extend the board and managing trustee terms from three to five years. “Three years is a short period to undertake any meaningful project; five years is adequate time to do something,” he said.
He highlighted structural challenges, noting that the current system splits contributions into tiers, which complicates benefit collection.
“These tiers are what we are having a problem with. The bulk of the money is in Tier 2, which can go anywhere through members exercising an opt-out. This opt-out of contributions can go to three different companies. How will the contributor collect it? This creates untidiness,” Koross said.
To address the issues, NSSF proposes consolidating contributions into a single tier and allowing all voluntary contributions under the Provident Fund.
The fund also seeks to allow members to withdraw 50 per cent of benefits if they lose employment, and to introduce a funeral grant for voluntary contributions.
In addition, Koross asked Parliament to approve four pending regulations essential for implementing the Act.