NSSF assets value down by Sh7bn

The NSSF headquarters in Nairobi. Photo/ANTHONY KAMAU 

By WACHIRA KANG’ARU

The National Social Security Fund (NSSF) has released its financial report for the year to June 2009 declaring a Sh7 billion loss in assets value.

A worry to the contributors of the fund as the trend carries the risk of wiping out their contributions leaving them with nothing to look forward to in retirement, disability or their dependants in case of death.

Old age

Set up to “secure the future of all Kenyans against economic and social distresses such as sicknesses, invalidity, old age and death”, the fund reported Sh7 billion negative growth in the scheme funds against Sh9 billion growth over similar period in 2008. This translates to 182 per cent decline.

The managers, however, attribute the fall to depressed market prices triggered by the global financial crisis that hit the market in the second half of 2008.

“That triggered a Sh11 billion unrealised loss in market value of equities,” a statement signed by the chairman Adan Mohamed and the managing trustee Alex Kazongo says.

The management projects the fund to grow by 10 per cent on the expected economic and market recovery.

“The fund’s performance, which largely depends on financial and economic performance of the country, is expected to improve as a consequence.

Members contributions increased by 11.4 per cent from Sh5.7 billion to Sh6.3 billion.

Membership to the fund is mandatory to all employees including house workers, who were roped into the bracket through a Kenya Gazette notice last year.

Pension scheme

The government is also contemplating amendments to the NSSF Act aimed at converting the fund into a mandatory National Social Insurance Pension Scheme.

On conversion, it will become an obligation for every Kenyan with an income to contribute a percentage of his/her gross earnings to the scheme in return for a guaranteed basic compensation in case of permanent disability, basic assistance to needy dependants in case of death and a monthly life pension upon retirement.

“Sadly, NSSF’s history has been marred by scandals and ill-conceived investment policies,” a statement posted on the fund’s website notes.