Labour Cabinet Secretary Kazungu Kambi. FILE
By VICTOR JUMA
Posted Wednesday, August 28 2013 at 21:09
Posted Wednesday, August 28 2013 at 21:09
In Summary
- New Bill that is before Parliament seeks to repeal sections of the law that reserve seats for Cotu and FKE in team of trustees.
- The two organisations have traditionally occupied two seats on the NSSF board and their removal effectively leaves the State in full control of the fund.
- The new Bill also removes all the checks and balances that the current law puts on the Labour minister in the appointment of the managing trustee.
Workers and their employers, who contribute
billions of shillings to the National Social Security Fund (NSSF) every
year, will have no say in the agency’s management if a new provision on
the composition of the board of trustees goes through Parliament.
The provision, contained in NSSF 2013 Bill, has repealed sections of the NSSF Act that reserved two seats on the board of trustees for the Federation of Kenya Employers (FKE) and the Central Organisation of Trade Unions (Cotu).
The two organisations have traditionally occupied two seats on the NSSF board and their removal effectively leaves the State in full control of the fund that had an asset base of Sh120 billion by the end of 2012.
The new Bill also removes all the checks and balances that the current law puts on the Labour minister in the appointment of the managing trustee.
The minister is currently required to appoint the managing trustee from a list of three recommended by the board of trustees but this provision has been removed from the proposed law, giving the minister a free hand to pick the top manager.
It is not clear why the State is seeking unfettered control of an organisation it has no single share in but where its presence has only been necessary to secure the public interest.
If it passes through Parliament the new law will leave future appointment of NSSF trustees exclusively in the hands of the Labour secretary and the President.
Cotu and FKE are opposed to the proposed composition of the NSSF board, saying it is driven by mischief.
“There is no reason why anyone would want to lock
out workers and employers who are the real owners of NSSF from its
management,” said Jacqueline Mugo, FKE’s executive director.
“The government simply wants to remove accountability in the running of NSSF,” she said, adding that the exclusion of FKE and Cotu is contrary to stakeholders’ recommendations made prior to the publication of the controversial Bill.
Benson Okwaro, the Cotu assistant secretary general, said the union will resist any attempt to exclude it from the NSSF board.
Mr Okwaro reckons that the State should only appoint representatives to the board of trustees as the country’s leading employer but must not push out other key stakeholders in the fund.
Both FKE and Cotu said they had not seen the Bill and promised to respond officially after consultations with their members.
The Business Daily could not reach Labour secretary Kazungu Kambi as his cell phone was switched off.
Ms Mugo and Cotu secretary general Francis Atwoli
have for years represented the interests of FKE and Cotu on the NSSF
board – in line with the current law.
If passed in its current form, the Bill will give the government full control of NSSF which has lost billions of shillings in the past three decades.
Out of the proposed nine board members, the Labour secretary will appoint seven trustees directly, and in addition pick two individuals with experience in human resources to “represent employers.”
FKE and Cotu have strong following and organised structures that better position them to check any mischief by government representatives at the fund.
Ms Mugo said that government appointees face a legitimacy crisis in purporting to represent the interests of groups whose acknowledged associations have been locked out by the State.
The minister will also appoint three individuals with knowledge in funds administration, insurance, and actuarial science.
The Treasury and Labour principal secretaries — who are appointed by the President — will occupy the two remaining positions giving the State full control of the multi-billion-shilling fund.
The new Bill proposes that the chairman of the fund be appointed by the minister out of the nine trustees.
Mr Kambi recently appointed Hope Mwashumbe as the acting managing trustee of NSSF after firing Mr Odongo, who has since gone to court to challenge his sacking.
The exclusion of FKE and Cotu comes as NSSF plans to raise members’ monthly contributions from a flat rate of Sh200 to a graduated scale that could face opposition from the two associations.
NSSF monthly contributions will rise to Sh360 in the first year of implementation of the new Bill and increase to more than Sh10,000 in the fifth year, with high-income earners incurring the biggest pay-slip deductions.
If passed in its current form, the Bill will give the government full control of NSSF which has lost billions of shillings in the past three decades.
Successive governments have since independence turned NSSF into a slush fund that is used to reward cronies with dubious contracts and finance political campaigns.
Out of the proposed nine board members, the Labour secretary will appoint seven trustees directly, and in addition pick two individuals with experience in human resources to “represent employers.”
The Bill says the minister will appoint two individuals with experience in labour relations to represent the interests of workers erasing Cotu or any trade union from the law.
FKE and Cotu have strong following and organised structures that better position them to check any mischief by government representatives at the fund.
Ms Mugo said that government appointees face a legitimacy crisis in purporting to represent the interests of groups whose acknowledged associations have been locked out by the State.
The Treasury and Labour principal secretaries — who are appointed by the President — will occupy the two remaining positions giving the State full control of the multi-billion-shilling fund.
The new Bill proposes that the chairman of the fund be appointed by the minister out of the nine trustees.
Mr Kambi recently appointed Hope Mwashumbe as the acting managing trustee of NSSF after firing Mr Odongo, who has since gone to court to challenge his sacking.
The exclusion of FKE and Cotu comes as NSSF plans to raise members’ monthly contributions from a flat rate of Sh200 to a graduated scale that could face opposition from the two associations.
The NSSF 2013 Bill is being introduced to Parliament weeks Mr Kambi sacked former NSSF managing trustee Tom Odongo accusing him of discussing details of the statutory fund with the media.
If passed in its current form, the Bill will give the government full control of NSSF which has lost billions of shillings in the past three decades.
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Successive governments have since independence turned NSSF into a slush fund that is used to reward cronies with dubious contracts and finance political campaigns.
Successive governments have since independence turned NSSF into a slush fund that is used to reward cronies with dubious contracts and finance political campaigns.
Out of the proposed nine board members, the Labour secretary will appoint seven trustees directly, and in addition pick two individuals with experience in human resources to “represent employers.”
The Bill says the minister will appoint two
individuals with experience in labour relations to represent the
interests of workers erasing Cotu or any trade union from the law.
FKE and Cotu have strong following and organised structures that better position them to check any mischief by government representatives at the fund.
Ms Mugo said that government appointees face a legitimacy crisis in purporting to represent the interests of groups whose acknowledged associations have been locked out by the State.
The minister will also appoint three individuals with knowledge in funds administration, insurance, and actuarial science.
The Treasury and Labour principal secretaries — who are appointed by the President — will occupy the two remaining positions giving the State full control of the multi-billion-shilling fund.
The new Bill proposes that the chairman of the fund be appointed by the minister out of the nine trustees.
The government-controlled board will appoint the
managing trustee who will sit as an ex officio member of the board. The
term of NSSF trustees — excluding the principal secretaries — has now
been limited to two three-year terms from the previous open-ended
tenures.
Mr Kambi recently appointed Hope Mwashumbe as the acting managing trustee of NSSF after firing Mr Odongo, who has since gone to court to challenge his sacking.
The exclusion of FKE and Cotu comes as NSSF plans to raise members’ monthly contributions from a flat rate of Sh200 to a graduated scale that could face opposition from the two associations.
NSSF monthly contributions will rise to Sh360 in the first year of implementation of the new Bill and increase to more than Sh10,000 in the fifth year, with high-income earners incurring the biggest pay-slip deductions.
The NSSF 2013 Bill is being introduced to Parliament weeks Mr Kambi sacked former NSSF managing trustee Tom Odongo accusing him of discussing details of the statutory fund with the media.
If passed in its current form, the Bill will give the government full control of NSSF which has lost billions of shillings in the past three decades.
Successive governments have since independence turned NSSF into a slush fund that is used to reward cronies with dubious contracts and finance political campaigns.
Out of the proposed nine board members, the Labour secretary will appoint seven trustees directly, and in addition pick two individuals with experience in human resources to “represent employers.”
The Bill says the minister will appoint two individuals with experience in labour relations to represent the interests of workers erasing Cotu or any trade union from the law.
FKE and Cotu have strong following and organised structures that better position them to check any mischief by government representatives at the fund.
Ms Mugo said that government appointees face a legitimacy crisis in purporting to represent the interests of groups whose acknowledged associations have been locked out by the State.
The minister will also appoint three individuals with knowledge in funds administration, insurance, and actuarial science.
The Treasury and Labour principal secretaries — who are appointed by the President — will occupy the two remaining positions giving the State full control of the multi-billion-shilling fund.
The new Bill proposes that the chairman of the fund be appointed by the minister out of the nine trustees.
The government-controlled board will appoint the
managing trustee who will sit as an ex officio member of the board. The
term of NSSF trustees — excluding the principal secretaries — has now
been limited to two three-year terms from the previous open-ended
tenures.
Mr Kambi recently appointed Hope Mwashumbe as the acting managing trustee of NSSF after firing Mr Odongo, who has since gone to court to challenge his sacking.
The exclusion of FKE and Cotu comes as NSSF plans to raise members’ monthly contributions from a flat rate of Sh200 to a graduated scale that could face opposition from the two associations.
NSSF monthly contributions will rise to Sh360 in
the first year of implementation of the new Bill and increase to more
than Sh10,000 in the fifth year, with high-income earners incurring the
biggest pay-slip deductions.
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