On its website, the National Social Security Fund admits one thing: that in its recent history it has been marred by “scandals”, “ill-conceived investment policies”...and “regrettable investment decisions.” It calls these “errors of the past.”
Few institutions, even those neck-deep into economic morass would admit to such a history; opting to wallow in deceit than tackle the past and move on. NSSF, a bottomless Sh100 billion pit, had been searching for a fund manager for the last 10 months to manage members contributions. And finally, this week they picked an insider Tom Odongo, who had been acting to take up the mantle after going through the recruitment motions. While this is a break from the past when the Managing Trustee was a political appointee , we are glad that the Executive has had no say and allowed the NSSF Board to interview candidates for the job.
We shall be keenly watching how Mr Odongo and the NSSF Board carry the institution forward.
Of interest to us is how they will turn this outfit from a provident fund into a pension scheme and protect members’ contributions from political interests.
The NSSF has over the years been used by political shenanigans to raise money to finance their political campaigns and it is during such times that the body found itself in dubious investments.
Mr Odongo will be in charge of a new body once the NSSF Bill 2012, approved recently by Cabinet, becomes law. But we shall not rest until NSSF stops the sheer wastage of members’ contributions.
For instance in 2011, the fund spent Sh5.2 billion from the Sh6.8 billion collected on administration.
That means that the fund is currently using Sh153 to manage Sh200, which is nearly 75.5 per cent and it is 400 times more than what private pension schemes claim as expenses. Majority of these cash is spent on the 1,700 staff members across the country.
It is important that the new NSSF Bill has capped such wastage and now the board cannot spend more than 2.5 per cent of total assets on administrative costs. Odongo must lead from the front.
We also want to be assured that the body is keenly pursuing those who looted members’ contributions. We have seen politically-correct individuals return to claim billions from the fund and its managers agreed to pay in out-of-court arbitration exercises.