NSSF mulls over grand housing project

March 21, 2012
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NAIROBI, Kenya, Mar 21 – The National Social Security Fund (NSSF) is mulling to further expand its real estate domain with what could be the region’s biggest residential project yet.

Acting Managing Trustee Tom Odongo said they are planning to build 30,000 housing units in a mixed residential development in Mavoko.

“We did an international tender a year ago. We would like to partner and do a joint venture with international bodies who are willing to invest, so we can jointly develop the housing estate,” he said.

Odongo said the evaluation process of the tender is still going on and should be finalised next month.

NSSF is a major investor in Kenya’s real estate sector with an investment portfolio worth billions of shillings in residential and commercial properties in Nairobi.

Some of its investments are the NSSF Building at Community, the Nakumatt Lifestyle complex, Mountain View estate in Kangemi, Bruce House in the Central Business District and NSSF House, among several others across the country.

Last year, the Fund also decided to outsource its investment arm worth Sh65 billion to Kenya Commercial Bank and Standard Chartered Bank for custodial services and six fund managers including Genesis Fund Manager, PineBridge Investments, ICA Wealth Management, Corporate Trust, Stanbic Investment Management Services (SIMS) and Old Mutual.

Odongo said the move was necessary to ensure NSSF conducted due diligence in the management of its assets by monitoring activity of the fund managers on a quarterly basis.

In efforts to improve its governance structures, the social fund is also seeking to amend the NSSF Act, through a transformation Bill, currently being deliberated on, to create more transparency and achieve a more comprehensive approach to social security in the country.

Odongo noted that as it stands the current member contribution of Sh400 is not sustainable, adding that an increase has been proposed in the Bill to ensure that the Fund can provide members better benefits.

“The issue of how much we propose for members to contribute in the new bill is still up for discussion. Let it come from stakeholders on whether they want to contribute a percentage of their earnings or a figure because people don’t earn the same,” he said.

Odongo added that the member contribution has not changed since 1965, and the required percent on earnings still pegged at five percent compared to countries in the region such as Tanzania where it is 10 percent.

Efforts have been made to encourage members to contribute more, through initiatives like the top up scheme that allows Kenyans in permanent employment to increase their monthly contributions through check off system.

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