PENSIONS industry regulator has faulted the proposed NSSF Bill saying that the scheme should not be allowed to be its own watchdog.
Retirement Benefits Authority which regulates the industry has said NSSF should not be the one deciding which private scheme can opt out of the mandatory payments as stipulated under the proposed law.
"They cannot be a regulator of their scheme. They cannot be the ones who decide which private pension fund is good enough to opt out and which one is not," said RBA chief executive Edward Odundo.
The NSSF Bill has a provision for employers with sound benefit schemes to opt out of the mandatory NSSF contributions to spare members from contributing to several pension funds.
"We do not want Kenyans to be tied to one scheme. NSSF should become a default scheme such that if you are not in any other scheme, you are automatically required to be a member of NSSF," said Odundo.
Odundo was speaking yesterday at the RBA open day held in Nairobi. This year's open day which ends Saturday seeks to popularise use of benefits by members to secure mortgages to increase number of homeowners in Kenya. The event is themed 'owning your own home using retirement benefits.'
This was the first time RBA, a key stakeholder in the pensions industry has given its views on the proposed law which has drawn missed reactions from various groups and organizations.
Last month, the Association of Retirement Benefits Schemes, which comprises of operators of private retirement pension schemes also shared RBA's views and added that NSSF should separate social security benefits such as maternity and employments grants from the retirement benefits.
The NSSF Bill seeks to make the Fund more beneficial to its members by transforming it to a pension fund from the current provident status.
Members of NSSF will be able to get emigration and funeral grants and six-months financial support in case of job loss if the proposed law is enacted.
The draft law which has over the last two months been deliberated on by various stakeholders also seeks to introduce a maternity grant for members.
"Things like maternity should be left to the NHIF (National Hospital Insurance Fund)," added Odundo. RBA said it will continue discussions on the proposed law with relevant bodies to address these concerns.