Head of Pensions at Jubilee Insurance David Ogega speaks at a briefing
on National Social Security Fund Scheme at Hotel Intercontinental,
Nairobi, on January 31, 2014. Private insurers and employers want the
government to ensure accountability in the running of the National
Social Security Fund, following the introduction of new levies. PHOTO |
ANTHONY MUYA
NATION MEDIA GROUP
Private insurers and employers want the
government to ensure accountability in the running of the National
Social Security Fund following the introduction of new levies.
During
a breakfast forum organised by Jubilee Insurance on Friday,
participants said the fund had been rocked by financial mismanagement in
the past.
Jubilee Insurance head of pensions David
Ogega welcomed the new law saying the fund must be run well for the sake
of contributors.
“That (mismanagement) has been of
concern and we hope this time things will be done differently,” he said,
while taking participants through the new regulations.
The
Association of Kenya Insurers was working in collaboration with the
Retirement Benefits Authority to ensure accountability in the pension
fund, he noted.
The latest controversy to hit the NSSF
was a Sh5 billion house development project in Tassia, Nairobi, which is
now under investigation by both Parliament and the anti-graft
commission.
Some members of the NSSF board of trustees have accused one another of irregularly approving the investment.
“We
hope with the new reforms, things will work out,” said Mr Ogega, adding
that they had already sent proposals to the government on other rules
they want changed in order to run the fund better.
Employers
noted that following introduction of new levies, the cost of
administration would go up while others would be forced to revise their
contracts with employees.
Speaking at the function,
Jubilee chief executive Patrick Tumbo noted that Kenya’s pension
industry has potential for growth despite the changing regulatory
environment.
He however said that in 2012, life
insurance uptake was quiet low locally at slightly above one per cent
with Kenya lagging behind South Africa which is at 11.5 per cent,
Namibia (5.5 per cent) and Mauritius (4 per cent).
The
new act will see an increase in employer and employee contribution rate
from a capped value of Sh200 per month to six per cent of the monthly
pensionable earnings up to the prescribed maximum limit.
It will also see NSSF converted from a national provident fund to a social security (pension) or social insurance.
The bill was accented on December 24 last year but contributors will begin paying the new levy from May 31 2014.
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