Reports that China Jiangxi is demanding Sh2.1 billion from the National Social Security Fund (NSSF) for a stalled housing project in Embakasi is, to say the least, uninspiring.
The same contractor has another pending case with NSSF where it is seeking Sh6.9 billion after a court blocked it from building additional floors above Nakumatt Lifestyle store, a claim that an independent consultant wants whittled down to Sh1.8 billion.
Apart from the firm’s name, the other common thread in the two cases is that the NSSF faces the prospect of paying for work that is either not done or has no value to its contributors. That can only imply that its managers have been signing contracts that expose workers’ savings in the event unforeseen events disrupt execution.
But the irony doesn’t end there. The NSSF has an ultimate goal of giving best returns to its contributors. Obviously, the huge payouts being demanded by the Chinese contractor undermine that pursuit. Yet this is the same NSSF that has over the years failed to raise interest payable on retirement savings to match inflation.
In the year ended June 2017,for instance, its interest payout was six per cent against an average inflation rate of 6.3 per cent.
The previous financial year had a worse return on investment, an interest payout of three per cent.
The agency has also been on the spot for spending a disproportionately high amount on administration, a cost element that rose to 52.5 per cent of workers’ 2016/17 contributions.
Let NSSF live up to expectation. It must not only grow best possible return on workers’ savings, but must also safeguard its assets and cut unnecessary costs.
Long gone should be the days when the agency was largely tolerated as a den of scandals where systemic failures of managers and greed of influential individuals caused workers to lose billions of shillings.
Contributors would want to see the fruits of recent reforms. The changes in policy, personnel and legal framework undertaken in recent times must be seen as having been aimed at safeguarding the future of retirees. Otherwise, the planned changes such as increasing monthly contributions will not change the lot of the long-suffering low cadre workers.
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