National Social Security Fund: Most of Sh6.5b spent on staff salaries

Monday, August 5th, 2019 20:32 |
NSSF building. Photo/File

The National Social Security Fund (NSSF) has defended its Sh6.5 billion expenditure on administration, saying the expenses covered both the headquarters and the branches.

Acting managing director Anthony Omerikwa said in a statement that of the amount, Sh4.1 billion, was spent on staff emoluments and Sh2.4 billion on administration expenses. The fund has a workforce of 1,285 and more than 60 branches and sub-branches.

Parliamentary Labour and Social Welfare Committee last week asked NSSF management to provide a report in two weeks’ time explaining the expenses.

Board chairman General  (rtd) Julius Karangi, who appeared before the committee last week, said all the 1,285 staff are permanent and pensionable.

“There are no temporary staff working for NSSF, we have a well remunerated team,” Karangi told the committee chaired by Bura MP Ali Wario.

Members, led by Fabian Kyule (Kangundo) and Tom Odege (Nyatike), protested the high administrative costs.

Justify expense 

“Looking at the administrative expenses, the lowest worker at the Fund must be earning Sh200,000 or more. That is the only way you can justify an expenditure of Sh6 billion on 1,200 workers,” Kyule said.

Odege told the board that the huge expenditure requires clarification since it cannot be explained by just dropping figures. 

On whether employers already paying gratuity for their employees should be required to also pay contributions towards the same employees, Karangi said the issue has been tabled and is being handled by the National Labour Board (NLB).

The board comprises the government, employers and unions representatives.

Karangi added that the Fund had requested the Treasury Cabinet secretary to harmonise the definition of pensionable earnings. 

According to a report by the Auditor General on NSSF, employee contributions to the State-controlled fund totaling Sh755 million had not been remitted in the stipulated time period, according to 20 sampled employer files maintained by nine NSSF branches.

 “This was contrary to Section 8(a) of the NSSF Act 2013, which required employers to remit into the Fund contributions deducted from members in full and in time,” the AG  notes in the report.

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