Q&A With NSSF Managing Director Anthony Omerikwa

March 9, 2020

National Social Security Fund (NSSF) Managing Director Anthony Omerikwa answers questions from the public via Sunday Nation.

1 NSSF collections from members have continued to decline due to the mass layoffs of workers, closure of businesses occasioned by the poor performance of the economy, and employers who fail to remit contributions because of NSSF’s failure to enforce the legal provisions that mandate it to ensure that employers deduct and remit money from workers. What are you doing to address the problem? Raphael Obonyo, Nairobi

The fund is undertaking a sensitisation of members and employers about their obligations under the NSSF Act, 2013 through its 59 branches and Huduma Centres spread throughout the country. Prosecution of employers who default on their obligation is taken as the last resort to enforce compliance.

2 Can you tell Kenyans what measures, if any, the fund is taking to ensure that access affordable housing? In the past the fund partnered with private developers to develop estates like Hazina and Nyayo, which were predominantly for the wealthy and well-to-do, leaving out the middle- and low-income earners, who are the major contributors. Is the fund making any contribution towards affordable housing as part of the Big Four agenda? Paul Gesimba, Nairobi

The NSSF proposes to contribute to the delivery of 500,000 housing units in two major projects in Mavoko and Machakos town in Machakos County. NSSF is working with the government through the State Department of Housing and Urban Development to get suitable incentives, off-take facilitation and bulk infrastructure development to make the projects viable both for the target market as well as for the fund as an investment vehicle for member’s pension savings.

3 The change in market trends and dynamics in the employment sector, where the traditional models of employing staff on permanent and pensionable terms are being eliminated, presents a challenge to the pension industry. How does your organisation plan to ensure there is consistency in the pension savings in this sea of turbulence? Vincent Cheruiyot, Nairobi

The NSSF’s 2019-2022 Corporate Strategic Plan has put in place measures to ensure that the fund addresses the changing nature of jobs by putting in place structures to develop new products and nurture innovations that heavily leverage on technology that will cushion against the turbulence.

4 The story of Hazina Towers is not a very pleasant one, given the cost, the political fights around it and the unmet deadlines for completing the project. Meanwhile, we understand the contractor has earned a lot more in the form of idling fees because of the project stoppages and delays. What is the current state of this project and when do you see it being completed? How much has the fund spent in paying the contractor in the form of idling fees? Hesbon Nyongesa, Nairobi

The Hazina Trade Centre project is expected to add the portfolio of commercial buildings that the Fund has developed in the Nairobi CBD. The project encountered a number of challenges, key among them litigation from the then anchor tenant. The issues have largely been resolved and the project is back on track and is expected to be completed expeditiously within the current year. The fund has only paid for the works done so far.

5 The last audited results for the NSSF had a number of qualifications and it was clear the NSSF needed to hire more accountants even if it be on a temporary basis to clean the books of accounts. What is your view on this and what is being done to avoid a repeat of the same when the next audited results are published? Githuku Mungai, Nairobi

Most of the issues raised in the last audited results are legacy issues that the fund’s board of trustees and management are in the process of addressing wholesomely.

6 National Bank, which was majorly owned by the NSSF, was fully acquired by KCB in order to save it from collapse. What impact did the acquisition of National Bank have on the return on members’ contributions? Githuku Mungai, Nairobi

In the transaction, the fund acquired 39,780,275 ordinary shares in KCB. This transaction increased the fund’s members’ worth by Sh457 million.

7 A number of senior management positions at NSSF are yet to be filled and have remained in the hands of interim officers for long. In the past, the explanation has always been that the fund was waiting for a new managing trustee to be appointed before those other management positions could be filled. What has been the general impact of the lack of substantive senior managers on NSSF operations? When do you think the positions will likely be filled? Byron Mutunga, Nairobi

The staff who are acting are committed and there has been no major impact on the NSSF’s operations by lack of substantive senior managers. The fund has just finalised a job evaluation exercise and will advertise and competitively fill the vacant senior management positions soon.

8 I am 54 years and I want to retire at 55. When is the earliest I can get my dues? Humphrey Muigai, Nairobi

One is eligible to claim their benefit immediately upon retirement from active employment from age 50 years and above. All you need is to present your requisite documents to any of our NSSF branches and lodge a claim for subsequent payment within 15 working days.

9 NSSF contributions are important security after retirement yet there have been many complaints that some of the employee deductions are in several cases not remitted or not reflected in NSSF’s updated system. How are you handling this serious matter? Okulo Andrew Guya, University of Nairobi

Where the contributions are not reflected in members’ statements the NSSF is undertaking a continuous exercise to ensure that members’ statements are fully updated through its e-service platform. NSSF also carried out a campaign “Ni time” to encourage members to check their statements. Employers who have not remitted the contributions are always pursued through the legal mechanisms at the NSSF’s disposal.

10 Social protection is a basic and fundamental human right the world over. Now, I have noted that NSSF has been running a difficult-to-understand campaign all over the country to enlist via online platforms small traders and others in the informal sector to make contributions of as little as Sh20 every day using their mobile phones. Why not first conduct massive and results-driven civic education to sensitise all Kenyans on the need to save for the future? Dan Murugu, Nakuru

Over 80 per cent of the Kenyan workforce is in the informal sector, a majority of whom do not have a pension scheme or plan. This is why NSSF is carrying out a targeted campaign to bring them under the ambit of a pension scheme. However, the fund is carrying out civic education using a targeted approach so as to meet the various and diverse needs of the various segments of society. NSSF will do a massive results-driven civic education to encourage its members to top up their contributions due to the issue of adequacy and the general public to start saving for their retirement.

11 A number of social protection agencies in the country have been accused of running very huge and costly administrative bureaucracies which end up consuming a large percentage of funds to the detriment of intended beneficiaries. Indeed NSSF has been cited as one of the institutions used by the political elite for their selfish gains, including employing their relatives as members’ contributions fail to be invested in worthy ventures to secure them in old age. What is your take on these observations and allegations? Is your institution operating sustainably? Komen Moris, Eldoret

The enactment of the NSSF Act, 2013 brought with it a very strong governance framework that guides the operations of the fund and the current board chaired by Gen (Rtd) Julius Karangi is strong, diverse and very strategic and thus the legacy issues that plagued the fund historically will not recur.

12 Now you have the full mandate as the substantive managing trustee after several years in acting capacity. As a substantive managing trustee appointed through competitive recruitment, what has been your immediate task at NSSF? Abel Omondi, Nairobi

Ably guided by the board I have adopted a customer needs-driven management approach with the aim of ensuring that the fund’s members get maximum returns through prudent investments and to extend social security coverage to all Kenyans, including those in the informal sector, while supporting government initiatives.

13 The fund recently unveiled the “Haba Haba na NSSF” package specifically targeting the transport sector. What does this package entail? Chris Ombati, Nairobi

In partnership with others, the package of Sh100 per day provides for a holistic approach to Social Protection through provision of a retirement benefit, social insurance cover, permanent disability cover, funeral expenses cover and a sickness benefit cover and realisation of savings through use of gas as a cheaper alternative to fuel cars.

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