NSSF must work hard to regain public confidence

• NSSF’s past means extensive lobbying has to be done for the Bill to pass in the court of public opinion, even before it can be presented to Parliament for debate.
• That the fund has started by canvassing the support of key stakeholders, notably workers and employers, suggests that the organisation is aware of the need to cleanse itself from a murky past.
• For NSSF to retain public goodwill beyond the passing of the Bill, however, reforms need to be initiated at the board and top management level to ensure that they serve the common good.

In any other setting a proposal to increase the amount of money workers contribute for their retirement would be welcomed without much interrogation.

Thanks to a history of mismanagement, politically inspired investments and a notoriety of buying assets over the top and later disposing them of for loose change, caution has greeted the well-intentioned move by the National Social Security Fund.

The Bill for the transformation of the provident fund into a pension scheme with embedded welfare gestures reads like just what is needed to increase the national savings rate and with it spur investments.

To the worker, it promises a measure of self-reliance at old-age, a stipend while out of work and partial security when taking a mortgage.

It further draws in the diaspora to contribute towards retirement at home through correspondent arrangements with social security schemes in the countries where duty has called. Noble promises indeed.

However, the NSSF’s past means extensive lobbying has to be done for the Bill to pass in the court of public opinion, even before it can be presented to Parliament for debate.

That the fund has started by canvassing the support of key stakeholders, notably workers and employers, suggests that the organisation is aware of the need to cleanse itself from a murky past.

Support from these two groups is assured by the range of benefits to workers and the fact that very little additional burden will be heaped on employers in terms of payroll costs in rolling out the new scheme.

Perhaps that alone puts the Bill in good stead to marshall support in Parliament despite the governance challenges that need to be addressed now rather than later.

For NSSF to retain public goodwill beyond the passing of the Bill, however, reforms need to be initiated at the board and top management level to ensure that they serve the common good.

Having six members of the nine-member board drawn from government, employers and employees has largely played a key part in exposing the fund to political manipulation.

These could actually be reduced to accommodate representation from professional bodies. Critically, the position of managing trustee needs some protection to stop the huge turnover that has dogged continuity in the funds investment policies.

High administration costs are another area that require urgent redress. For the Fund to compete with other schemes on a comparable footing, it should immediately comply with any outstanding Retirement Benefit Authority compliance benchmarks.