Minister of Labour, Mr John Munyes. Photo/FILE
Posted Wednesday, October 22 2008 at 13:02
In Summary
- NSSF, only mandatory pension scheme in the country, has not made regular full account disclosures to members.
- There has been strong resistance by the NSSF to adhere to the RBA regulations since its creation.
- NSSF is said to have been used a cash cow by trustees through shadowy transactions.
The Retirement Benefits Authority is calling for an urgent actuarial audit of the National Social Security Fund.
According to the RBA Chief Executive Officer
Edward Odundo, the NSSF which has about 900,000 members should be
subjected to audit by the Inspector General.
The audit will seek to establish the age profiles and mortality rates of the members to ascertain if it were to pay them pension what gap would be left withstanding.
NSSF, which is the only mandatory pension scheme in the country, has also not made regular full disclosures of its accounts to members.
RBA demands that members should be furnished with copies of the benefit statements annually, their contribution returns and the publication of annual audited accounts.
“The NSSF has been using the funds for administrative purposes, which should not be the case,” said Mr Odundo adding that pension schemes all over the world use part of return on investment as operational costs.
He adds: “The value of the property owned by the NSSF needs to be re-assessed again to establish the actual market value.”
Even as Labour Minister John Munyes asked Kenya Anti-Corruption Commission to investigate into the shadowy dealing by the NSSF with Discount Securities Ltd, there has been strong resistance by the NSSF to adhere to the RBA regulations since its creation.
The regulations, which seek to bring the pension schemes in the country to transparent operations have received sustained opposition by the NSSF, to a point of tabling National Social Security Pension Trust Bill, to deviate from the RBA.
The NSSF has been used a cash cow by trustees through shadowy transactions.
In 2001, the fund lost Sh3.4 billion through shaky transactions by the then head of the board Mr Samuel Muindi.
It stands to lose a whopping Sh1.4 billion if the shaky Discount Securities Ltd does not produce certificates of shares it bought through creation of 82 nominee accounts on its behalf.
The Fund pleaded ignorance to the creation of the several accounts by the broker.
In 2001, the management board of the NSSF took the RBA to court to stop it from forcing NSSF to adhere to its regulations.
The board argued that NSSF was the oldest pensioners fund in the country and was created by an Act of Parliament and should not be subjected to external regulations.
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