Proposed NSSF Bill will not improve retired workers’ welfare

In Summary

• If the National Social Security Fund has not been able to manage the Sh200 workers have been contributing, how will it manage the 12 per cent increment?
• From experience, NSSF has not been able to manage retirees’ benefits well. Many have died before receiving their dues from the social security fund.
• This has made the fund one of the biggest examples of corruption in the government and there is little to show whether this has changed.

The proposed NSSF Bill 2012 to convert workers contribution from the provident fund to a pension scheme is ill-timed and unacceptable since it will be of no value to many Kenyan workers.

The Bill, which also proposes to increase workers’ contributions of Sh200 per month to six per cent of the employee’s monthly pensionable pay plus the employer’s six per cent is unjustified.

If the National Social Security Fund has not been able to manage the Sh200 workers have been contributing, how will it manage the 12 per cent increment?

From experience, NSSF has not been able to manage retirees’ benefits well. Many have died before receiving their dues from the social security fund.

This has made the fund one of the biggest examples of corruption in the government and there is little to show whether this has changed.

This was the reason why most companies had to come up with their own pension schemes to protect their employees pension dues.

The only way for the government to ensure the welfare of its citizens is first to establish a strong welfare schemes for the elderly and unemployed.

Secondly, the government should reduce the rate of taxation on the pension dues or do away with it altogether since this money has already been used in many development projects.

Seek KRA to boost funds collection, NSSF told

 

Finance minister Njeru Githae at the National Social Security Fund's inaugural annual general meeting on September 17, 2012. Photo/DIANA NGILA  NATION MEDIA GROUP

By MWANIKI WAHOME jwahome@ke.nationmedia.com

In Summary

• NSSF asked to reduce on its property portfolio in the country
• NSSF management asked to opt for other investment vehicles like treasury bills, infrastructure bonds and equities

The National Social Security Fund (NSSF) should consider investing in embassies and ambassadorial residences in foreign countries and enlist the services of the Kenya Revenue Authority (KRA) to collect funds to improve its performance.

Finance minister Njeru Githae, however, said the Fund should reduce its property portfolio in Kenya.

“Look at foreign missions and identify those that you can buy. You will already have the first tenant. We are paying too much in rent in foreign missions and residences,” he said.

He said Tanzania had taken similar steps to reduce the amount of money it pays as rent in selected countries.

Annual meeting

Mr Githae was speaking during the first annual general meeting of the National Social Security Fund at Moi International Conference Centre, Kasarani. He represented President Kibaki, who was to be the chief guest.

The minister told the NSSF management to look for other investment vehicles like treasury bills, infrastructure bonds and equities.

“When you look at the accounts you know what went wrong with NSSF. It moved from an investment company to a land-buying company. You should dispose off the plots you have and avoid buying new ones,” he said.

He said that during the Budget speech in June, he directed various corporations to rationalise activities such as revenue collection to avoid duplication and cut on costs.

President Kibaki, in the speech read on his behalf, said NSSF had contributed to development of the country through investing Sh28 billion in treasury bonds and infrastructure bonds last year, particularly in energy sector.

He added that it should partner with power producers to generate more power for the country.

He acknowledged the Funds role in development of housing, particularly a Vision 2030 project that will see 30,000 units constructed at Mavoko municipality.

He told stakeholders to support a Bill that intends to transform NSSF from a provident fund to a pension fund.

The Funds chairman, Mr Adan Mohamed handed Mr Githae his account balance sheet with the Fund, of Sh79,347.

“We need to review the rates, this is too low... after working for 15 years,” he said.

NSSF has already indicated that the contributions will be increased to 12 per cent of one’s salary, six per cent paid by the employer and the other by the worker.

Currently, each member contributes Sh200, regardless of salary level.

NSSF lost over Sh2bn in fallen banks: Report

 

NSSF building in Nairobi. Photo/FILE  Nation Media Group

By PAUL WAFULA pwafula@ke.nationmedia.com
Posted  Tuesday, September 18  2012 at  18:08

In Summary

• In its annual report and accounts for the year ended June 30, 2011, NSSF made a Sh2.1 billion provision as doubtful investments for the money deposited in closed financial institutions, a pointer that it has lost hope of recovering the money
• The report shows that Sh989.9 million was deposited in Prudential Building Society, Sh553 million went to Post Bank Credit Ltd, Sh197 million to Trade Bank, and another Sh166.5 million was deposited with Thabiti Finance Company. All these institutions are in liquidation
• Members also lost Sh1.2billion in 2009/2010 in respect of shares purchased through Discount Securities

The national pension fund lost Sh2.1 billion it had deposited with at least 10 financial institutions which have since gone into liquidation, its annual statement shows.

The statement gives the more than 1.4 million active members a rare peek into the financial health of the National Social Security Fund (NSSF) that had been hidden for 47 years. The fund was also duped into buying illegal forest land worth Sh1.13 billion in gazetted areas.

In its annual report and accounts for the year ended June 30, 2011, NSSF made a Sh2.1 billion provision as doubtful investments for the money deposited in closed financial institutions, a pointer that it has lost hope of recovering the money.

The report shows that Sh989.9 million was deposited in Prudential Building Society, Sh553 million went to Post Bank Credit Ltd, Sh197 million to Trade Bank, and another Sh166.5 million was deposited with Thabiti Finance Company.

All these institutions are in liquidation.

The pension fund also lost Sh131 million to Rural Urban Credit Finance, Sh57 million to Continental Credit, and Sh34.9 million to Pioneer Building Society, while Trade Finance went down with Sh6.6 million. The other financial institutions in liquidation include Middle Africa Finance (Sh3.6) million and Nairobi Finance Corporation (Sh3.3 million).

The Auditor General, Mr Edward Ouko, also questioned the firm’s investments in property in gazetted areas in Muthaiga, on Ngong Road and several irregular land transactions by the fund.

“The properties, being in gazetted areas… cannot be owned, possessed, utilised or accessed and any development on such land would be illegal. The carrying values of these properties, as at June 2011, stood at Sh1.13 billion yet no provision for the impairment loss was made in the financial statements during the year,” Mr Ouko said of the pension funds accounts.

Breach of laws

The fund also irregularly sold its Ojijo Road government gazetted plot for Sh303 million, in breach of procurement and disposal laws.

“The sale of the property was not advertised and it could not be confirmed how the buyer was identified and how the selling price was determined,” Mr Ouko noted.

He also took issue with Sh6.5 billion being held by NSSF in suspense accounts without indicating how the affected members would benefit from the money.

Members also lost Sh1.2billion in 2009/2010 in respect of shares purchased through Discount Securities.

Other areas the pension fund will have to deal with even as it goes ahead to shade off its old image as it seeks to transform itself from a provident fund into a pension fund include recovery of debts.

Bank deposits up amid liquidity woes in markets

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Monday, 14 January 2013 11:39

Prime Minister Mizengo Pinda opens a CRDB Bank branch in Mpanda. PHOTO | FILE Dar es Salaam. Scarcity of liquidity in the financial market, coupled with a widening of the avenues for portfolio investment and the coming of new commercial banks are the driving factors behind an increase in deposit rates during the past few months, experts say. This means that people who deposited their money with commercial banks during the past 14 months reaped some better interest earnings than those they earned before. According to CRDB Bank’s director of marketing, research and customer services, Ms Tully Esther Mwambapa, the scarcity of liquidity in the financial market was experienced following the tight monetary policy instituted by the Bank of Tanzania (BoT) to curb high inflation and the continuous depreciation of the local currency 14 months ago. As a result, the BoT said in its December 2012 Monthly Economic Review that annual growth of money in the financial system dropped to 11.1 per cent in November 2012 compared to 21.1 per cent recorded in the corresponding period in 2011, reflecting the impact of the tight monetary policy stance adopted by the bank. “Thus, the coming of new players made things even worse, forcing commercial banks to start competing for depositors’ money…..It is that competition that pushed up depositing interest rates though terms and conditions attached to these rates make them differ,” says Ms Mwambapa. She said as a result, her bank currently offers deposits’ interest rate of up to 6.5 per cent for less than Sh1 billion that stays in the bank for three months, up from a previous rate of 1.5 per cent in average. Consequently, for the six and nine months, the rates have also gone up to 7.5 per cent and 7.75 per cent from an average of 2.5 per cent and 3.5per cent respectively. For deposits that stay in the bank for 12 and 24 months, rates went up to 8.5 per cent and 9 per cent respectively from an average of 3.5 per cent for a less than Sh1 billion deposit. Deposits above Sh1 billion are subjected to a rate to be offered by the dealing room, which, according to Ms Mwambapa, mostly offers higher interest rates. The Tanzania Securities Chief Executive Officer, Mr Moremi Marwa, was recently quoted as saying that investors currently have wider investment options that range from deposits that fetch yields of 8 per cent on average, T-bills between 15 and 18 per cent and equity yields which fetch above 10 per cent. “This is good for investors as banks and equities are competing for funds….Those with huge funds are the ones who benefit most from the said banks’ interest rates including pension funds and fund managers,” Mr Marwa said. Last year, a number of banks ran promotional draws geared at attracting deposits while new entrants such as First National Bank of South Africa came up with competitive deposit interest rates of up to 12 per cent. The increases in return reduced the spreading between lending and deposit interest rates. According to BoT, overall time deposit rate increased to 8.56 per cent in June 2012 from 6.06 per cent recorded in June 2011, while lending rates for short-term loans of up to one year stands to an average rate of 13.92 per cent. “As a result, the spread between 12-months deposit rate and one-year lending rate narrowed to 2.82 per cent from 6.82 per cent recorded in June 2011,” the last July Monthly Economic Review report said. On other hand, World Bank report published in 2012 shows that the deposit interest rate in the country was last reported at 6.57 per cent in 2010.

Panic as PPF Tower floor burns

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Monday, 04 February 2013 10:38

By Frank Aman and Aloyce Mpandana The Citizen Correspondents Dar es Salaam. The 17th floor of the PPF Tower in the city yesterday caught fire, where properties whose value could not be immediately established were destroyed. The skyscraper located at the corner of Ohio Street and Garden Avenue, was built in 1999 by the Parastatal Pensions Fund (PPF). According to acting commissioner general of the Fire and Rescue Brigade, Mr Pius Nyambacha, the cause of the fire was yet to be established and investigations into the incident were still going on. He said, the fire destroyed some items that were in the 17th floor due to the lack of automatic fire detectors. “The building caught fire around 6am. However, we managed to evacuate people and extinguish the fire before it spread to other floors,” he said. Mr Nyambacha said, due to lack of vehicles that could extinguish fire in buildings with the height of more 57 meters, fire fighters were forced to break their way in to kill the blaze. According to PPF director general William Erio, tenants occupying the floor which caught fire yesterday are SevenSeas Shipping Agencies Tanzania and Abbot Fund. Dar es Salaam Special Police Zone Commander, Mr Suleiman Kova, said police would investigate the cause of the fire and report about the loss of properties soon. “It’s hard to know the cause of the fire at the moment,” he said. Dar es Salaam regional commissioner Said Mecky Sadick instructed the Fire Department to inspect all buildings to check whether they met fire safety requirements.

NHC set to build 900 low-cost houses

By Bernard Lugongo The Citizen Reporter Dar es Salaam. At least 900 low-cost houses to be allocated to wananchi on a loan basis are under construction in a programme run by the National Housing Corporation (NHC).The houses would be sold for between Sh25 million and Sh200 million, targeting both low-income and high-income earners. NHC has already surveyed 20 regions for the massive project which will be completed by 2015. With the ultimate aim of building 15,000 houses in the next three years, the NHC plans to begin with 3,000 houses each year, 1,500 of them specifically targeting low-income earners. The regions where construction is in progress include Dar es Salaam, Arusha, Dodoma and Mwanza where the major projects are based. Smaller projects are being run in Iringa, Mbeya and Mara regions. According to the NHC head of Corporate and Public Affairs, Ms Susan Omari, the survey in those regions was completed recently and was aimed at identifying sites for constructing houses and market premises.Ms Omari was addressing journalists yesterday in Dar es Salaam during an event to mark World Habitat Day, where NHC participated as one of the stakeholders in the housing sector. She said the survey was carried out by a special team which came up with a report that would give a path for starting the project in the regions. “The report has identified lands for construction work; soon we are going to make public where to find the houses,” she said. The project was sealed recently when the NHC signed a Memorandum of Understanding (MoU) with seven banks and two financial institutions to avail Sh165billion in loans for the construction of the houses. Banks that have signed the MoU with NHC are CRDB Bank (Sh35 billion), ECOBank (Sh2 billion), Banc ABC (Sh4.2 billion), NMB PLC (Sh26 billion), Commercial Bank of Africa (T) Ltd (Sh24 billion), Tanzania Investment Bank (Sh22 billion) and Azania Bank (Sh7 billion). Other financial institutions are Local Authority Pension Fund (Sh15 billion) and Shelter Afrique (Sh23 billion). To further enhance mortgage lending in 2010, the government with the World Bank’s support facilitated the establishment of a mortgage liquidity facility under a private company known as the Tanzania Mortgage Refinancing Company (TMRC). The TMRC, which will have the role of refinancing primary mortgage lenders, will start work before the end of this year, the minister revealed. During yesterday’s event to mark World Habitat Day, the government acknowledged that there was poor supervision of laws governing city plans, which was among major factors leading to unplanned settlements. Deputy minister for Works, Mr Greyson Lwenge, said district and city councils have not been putting enough enforcement into such laws.“I direct all councils to ensure that they follow firmly on laws on city plans to avoid unplanned settlements,” Eng Lwenge said. Unplanned settlements in the cities have been causing the areas to face severe challenges in provision of social and economic services due to poor infrastructure. “In order to bring development, the residents should have better settlements,” he said. Currently, Tanzania has a population of 12 million people, equivalent to 30 per cent, who live in cities. It is estimated that by the year 2030, about 50 per cent of the country’s population will be living in cities. For his part, Representative of the United Nations human settlement programme (UN-Habitat), Mr Philemon Mutashibirwa, called for an increase of opportunities in line with an increase of population in the cities.Mr Mutashubirwa was presenting a message from the UN Secretary General Ban Ki-moon on the marking of the Day.

Kwa nini michango ya pensheni isitumike kummilikisha nyumba mwanachama

Na Christian Gaya Majira 05 February 2013

Nyumba ina mchango mkubwa kwa upande wa uchumi, kijamii na kisiasa, na alama au muonyesho wa maendeleo na ustawi wa jamii katika nchi yeyote ile. Hivyo basi ni kitega uchumi ambacho kinachangia katika kupunguza kama siyo kuondoa umaskini kabisa, nyumba ni kitega uchumi ambacho kinachangia kuongezea ajira, kinaongezea mapato, kinaboresha afya na kuongeza ufanisi kwa nguvu kazi

Nyumba kwa mwenye nayo au anaye miliki ni rasilimali ambayo inawezekana kubadilishana na kitu chochote kwa vile kina thamani yake na ikatumika kwa vile ina thamani yake inayotambulika. Kijamii nyumba inachangia kuhamasisha na kuboresha nafsi ya mtu, utu, usalama na kutambuliwa mbele za watu. Kisiasa, nyumba bora inapunguza vitishia vya kisiasa vinavyotokana na kugandamizwa na kuchanganyikiwa hasa kwa watu wanaoishi kwa mazingira hatarishi na makazi yasiyokuwa rasmi

Kutokana na upeo wa michango au mafao ya pensheni, umilikaji wa nyumba ni sehemu ya upangaji mzuri wa jinsi ya kustaafu. Kumiliki nyumba wakati wa kustaafu inawalinda wastaafu kutokana na mahitaji ya mtiririko wa fedha mkononi-mahitaji ya mapato au fedha mkononi kwa ajili ya kuitumia kwa kulipia kodi ya nyumba inakuwa tayari imeshapungua.

Pamoja na hayo tena inawalinda wastaafu kutokana na maamuzi mabaya ya uwekezaji, na faida mbaya inayotokana na uwekezaji ikiwemo na mfumuko wa bei ambao hauendi na ukali wa maisha wa wakati huo. Vile vile inamwandaa mstaafu na maisha yenye heshima usoni mwa jamii na yenye utu mzuri wa hali ya maisha. Umilikaji wa nyumbani kwa kweli huchangia kiasi kikubwa kwa wastaafu kwa ajili ya kuwaandaa maisha ya ulimwengu wa kustaafu na katika kuwatengenezea staili ya miaka yao ya mwanzoni kabla hawajastaafu.

Kuna haja kubwa kabisa msimamizi na mdhibiti wa mifuko ya pensheni ya hifadhi ya jamii yaani (SSRA) kubuni mikakati ya kuhamasisha uhitaji wa nyumba ili kuwezesha wanachama wa mifuko hii ya hifadhi ya jamii kununua nyumba za gharama nafuu. Kwa mfano Singapore wanachama wa hifadhi ya jamii wanaruhusiwa kutumia asilimia 75 ya akiba yao ya michango ya pensheni kwa ajili kukopeshewa nyumba au kwa ajili ya kununulia nyumba maalumu anayohitaji.

Wakati Mauritius na Africa kusini mifuko ya pensheni ya hifadhi za jamii kama vile Shirika la Taifa la Hifadhi ya Jamii (NSSF), Shirika la Pensheni kwa ajili ya Mashirika ya Umma (PPF), Mfuko wa Pensheni wa Hifadhi ya jamii kwa ajili ya Watumishi wa Umma (PSPF) na Mfuko wa Akiba ya Wafanyakazi wa Serikali (GEPF), Mfuko wa Bima wa Taifa yaani (NHIF), mfuko wa pensheni ya Hifadhi ya jamii kwa ajili ya Wafanyakazi wa Serikali za Mitaa yaani (LAPF). Pamoja na Mfuko wa Taifa wa Hifadhi ya Jamii wa Zanzibar (ZSSF) yanaruhusu kutoa mikopo moja kwa moja kwa wanachama na hata vilevile wanachama wa mifuko ya pensheni ya hifadhi ya jamii kutumia sehemu ya theruthi mbili (2/3) ya mafao yao ya baadaye kama amana ya kumpatia mikopo benki na kupata mkopo wa nyumba kutoka taasisi za nyumba au mashirika ya nyumba ya nchi hizo kama vile Shirika la Nyumba la Taifa (THC) la Tanzania.

Na mafao yaliyosalia yanaachwa kama yalivyo bila kuguswa mpaka wanachama atakapofikia wakati wa kustaafu kwa hiyari au kwa lazima. Wanachama waliokopa wanalipa riba kwa muda wote na kuhurusiwa kuingilia mafao kulipa deni halisi alilokopa wakati utakapofika muda wake wa kawaida wa kustaafu. Kwa Afrika kusini viongozi wa hifadhi ya jamii wanapandisha mkopo wa nyumba kwa kutumia soko la mtaji kwa kutoa amana ya pensheni ili kumwezesha mwanachama wa hifadhi ya jamii kumiliki nyumba

Tanzania hairuhusu wanachama wa mifuko ya pensheni ya hifadhi ya jamii kuingilia michango yao ya akiba ya pensheni kwa ajili amana ya kujipatia nyumba ya mkopo. Kwa maana hiyo kuna baadhi ya taasisi au mashirika ambayo yafanya kuwa siyo ya ushindani hasa pale yanapokuja na masharti magumu yanayofanya kwa mtu asisitahili kabisa kupata nyumba ya mkopo. Pamoja na hayo idadi kubwa ya wanachama wa mifuko hii ya hifadhi ya jamii wanakopo kutoka katika taasisi hizo bado idadi kubwa ya wanachama mpaka sasa hawafikiwi. Wakati njia ya kutumia akiba ya michango ya pensheni ambayo huchangiwa na mwanachama na mwajiri wake ilikuwa ndiyo njia pekee ya mbadala ya kumwezesha mwanachama kupata mkopo wa nyumba. 

Katika kutambua umuhimu wa ungezeko wa uzalishaji nyumba kwa ajili ya kuhudumia watu wanaongezeka kila siku, serikali mara kwa mara  imekuwa ikiaangalia uwezekano wa kuwa na ufumbuzi  wa aina mbalimbali na hata vilevile kushawishi ushiriki wa sekta za watu binafsi ili kufikia lengo hili la nyumba. Uwezekano wa kupata mikopo ya fedha kwa waendelezaji na wanunuzi kumekuwa ni mojawapo ya sababu zilizochangia kuwa na uhaba wa nyumba.

Baada ya kutambua kwa thamani ya uchumi ya sekta hii muhimu ya pensheni ya hifadhi ya jamii iliyokuwa nayo mpaka sasa, mwaka 2008 serikali iliunda chombo cha kusimamia na kuthibiti mifumo hii ya hifadhi ya jamii. Muda umefika sasa kwa serikali kuchukua maamuzi ya makusudi ya kuchukulia sekta hii ya hifadhi ya jamii kama chombo ambacho  kinachoweza kuwa na mchango mkubwa wa kutoa mikopo kwa ajili sekta

ya nyumba

Chombo cha kusimamia na kuthibiti sekta ya pensheni ya hifadhi ya jamii yaani SSRA kimetoa miongozo ya uwekezaji pamoja na kuruhusiwa mifuko ya pensheni ya hifadhi ya jamii kujihusisha na uwekezaji wa rasilimali pamoja na nyumba/makazi mpaka kikomo cha asilimia 30% ya jumla ya fedha zote za mfuko. Na mifuko inaweza kujenga au kununua rasilimali isiyohamishika. Isipokuwa  michango au mafao ya pensheni haiwezi kutolewa kwa ajili ya kumwezesha mwanachama kupat mikopo ya nyumba au haiwezi kutumika kama amana ya kupata nyumba ya mkopo au dhamana ya kupata mkopo wa nyumba kwa ajili ya faida au manufaa ya mwanachama wa mfuko wa hifadhi ya jamii