, NAIROBI, Kenya, Sep 4 – The Retirement Benefits Authority has asked the government to revise the National Social Security Fund Bill pointing out that it will kill the private pension industry if not addressed.
Retirement Benefits Authority Chief Executive Officer Edward Odundo says the law makes it difficult for employees to opt for other private pension schemes for their staff.
Odundo said that though the Bill has room for employers with sound benefit schemes to opt out of the mandatory NSSF contributions, the conditions for opting out have not been well defined under the proposed law.
“What is going to happen to private pension schemes that are there today, are we going to scrap them?” he asked.
Odundo says the structure of NSSF should also be addressed in order make it more efficient.
“The governance in terms of the trustees and in terms of investments (needs to be addressed) because even the current bill doesn’t give how those funds will be invested. We have had many scandals with the fund, and if we don’t address governance we won’t go anywhere,” he said.
He said that they will present the plea to Parliament and to the Attorney General for consideration.
The Bill which seeks to upgrade NSSF from a fund to a pension scheme proposes that all workers pay at least 12 percent of their gross salaries which will be equally split between the worker and the employer.
The Bill is set to be presented to Parliament by majority leader Aden Duale when the National Assembly resumes normal sittings on September 17.
Odundo was speaking at a regional workshop on supervision on Wednesday where plans are set to harmonize pension’s regulations across the East African region to allow portability of pensions in the region.
He said the pension industry is growing at a high rate.
“The pension is growing very fast. We are at Sh600 billion… we are going at a level of 10 percent per annum,” he said.
He estimated that the country will hit a trillion marks in the next three years. He attributed this growth to the awareness of pension schemes.