Private sector wants NSSF regulated

By James Anyanzwa and Jackson Okoth

Employers and fund managers have urged the Government to regulate activities of the National Social and Security Fund (NSSF) instead of pulling out civil servants.

They said it was ‘unfortunate’ that the Government had made the decision, yet failed to streamline management and rid of entrenched corruption at the pension fund.

"To bring sanity to the management of NSSF, it must be brought under the ambit of the Retirement Benefits Authority," says Mr James Oyugi, Head of Pensions, CFC Life, a key provider of individual pension plans.

Previous attempts to bring NSSF under the supervision of Retirement Benefits Authority (RBA) have been resisted by the fund’s board, exposing it to poor management practices.

Federation of Kenya Employers (FKE) said it could not ask its members to stop contributing to the Fund because it is a statutory requirement.

The federation, however, exuded confidence that the Government move could open the window for employers to seek an alternative pension scheme for their workers.

"We want an independent and professionally-run scheme for employers," said Ms Jackline Mugo, FKE executive director.

On Wednesday, Public Service Minister Dalmas Otieno announced the Government would withdraw 26,000 members, most of them civil servants in job groups A to D to join its new contributory pension scheme. The action is expected to deny the fund about Sh124.8 million annual contributions from the Government.

NEW SCHEME

The scheme will cover all new entrants into the civil service and all employees aged 45 years and below as at June 30.

Those aged 45 will, however, have the option to join the scheme or to remain in the current one.

The new scheme has been approved and will be implemented from July 1. " We have been waiting for NSSF to reconstitute its board and consider our proposal to appoint a fund manager and custodian to manage the fund," Mr Edward Odundo, the Retirement Benefits Authority CEO told The Standard.

He said a move to shift low cadre civil servants from NSSF cannot be effected until a policy is issued to this effect, probably in July this year.

"There new entrants in the market, offering more attractive returns and better management of funds, attracting many employers," says Mr Dominic Kiarie, Managing Director British American Asset Managers.

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