24 October 2008
Nairobi — Stakeholders want the National Social Security Fund Act reviewed to prevent it from investing in property to avoid scandals facing it.
The Retirement Benefits Authority says NSSF should only go to bonds and treasury bills.
Just like the Kenya Revenue Authority whose collections usually goes to the Central Bank of Kenya, the NSSF contributions should also be channelled to CBK and used in infrastructure bonds and others.
"Nothing should be invested. Like KRA, NSSF money should go to CBK and the body only given what it intends to use in its budget. Only a portion of the money should be used. We need to stop NSSF from funding investments," RBA chief executive Eddy Odundo said.
Speaking from his Rahimtulla Plaza offices on Friday, Mr Odundo said although interests in treasury bonds and bills are low, the workers money would protected if NSSF injected it there.
Mr Odundo cited countries like Malaysia which controls billions of shillings as one whose social security fund money were injected in bonds and Treasury Bills.
Stopping NSSF from engaging in investments like constructing houses directly, Mr Odundo said, will dis-empower the board and stop it from frequent loss of money and protect members contributions.
"The public money held by NSSF should go straight into bonds like for roads and houses," Mr Odundo said.
Mr Odundo regretted that NSSF was yet to comply with RBA requirements.
Mr Odundo further called for an urgent audit of the National Social Security Fund in the wake of a potential loss of Sh1.4 billion in a dodgy investment deal with a troubled stockbroker.
With about 900,000 members, Mr Odundo said, NSSF should be subjected to audit by the Inspector General.
NSSF, which is the only mandatory pension scheme in the country, has also not been making regular full disclosures of its accounts to members.
It should also ascertain the actual value of property and other investment ventures by the pensioners' body.
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