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NSSF sues agencies over unremitted Sh5.7bn deduction

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NSSF headquaters. FILE PHOTO | NMG

Summary

  • The National Social Security Fund (NSSF) has now moved to court to recover Sh5.7 billion from two other state agencies and the defunct local authorities in unremitted mandatory staff contributions.
  • The amount owed by the Kenya Ports Authority (KPA), Kenya Wildlife Service (KWS) and the defunct local authorities as at June 30, 2019, includes Sh580.76 million in mandatory members’ contributions and the penalties of Sh5.12 billion.
  • By April 2020, the unremitted members’ contribution and penalties accrued from the arrears stood at Sh5.81 billion.

The National Social Security Fund (NSSF) has now moved to court to recover Sh5.7 billion from two other state agencies and the defunct local authorities in unremitted mandatory staff contributions.

The amount owed by the Kenya Ports Authority (KPA), Kenya Wildlife Service (KWS) and the defunct local authorities as at June 30, 2019, includes Sh580.76 million in mandatory members’ contributions and the penalties of Sh5.12 billion.

By April 2020, the unremitted members’ contribution and penalties accrued from the arrears stood at Sh5.81 billion.

This is as per the report by Auditor-General Nancy Gathungu on the accounts of the NSSF for the year ending June 30, 2019, currently before parliament for the court of account hearings.

The audit shows that KPA has not remitted Sh185.89 million in staff contribution to NSSF, KWS Sh146.05 million and the defunct local authorities- the largest- at Sh241.26 million.

Recovering the arrears from KPA and KWS is likely to present a difficult task considering that the two state agencies have disputed the arrears on the basis of their validity.

The two agencies have further sought the intervention of Attorney-General Kihara Kariuki as NSSF breathes under their necks.

“Legal action has been taken on some employers like KWS and KPA who have disputed the debts and sought legal opinion from the Attorney-General’s office on the validity of the debts,” a document filed in parliament by NSSF Managing Trustee Dr Anthony Omerikwa, reads in part.

For the case of the defunct local authorities, NSSF is engaging the Inter-Governmental Relations Technical Committee (IGRTC) and the Council of Governors (CoG) to recover the arrears.

“This engagement is an ongoing exercise,” the document further reads.

Ms Gathungu says that the failure by the NSSF management to recover the unremitted amount is an indication of weak controls at the fund.

“Although the management has indicated that recovery efforts are in progress, no satisfactory explanation was provided for the non-recovery,” says Ms Gathungu.

NSSF has the mandate to register members, collect their contributions, prudently manage and invest the contributions and to pay them specified benefits when due in accordance with the NSSF Act of 2013.