NSSF: Contributors to earn 12.5pc on savings
By Ronald Owili
National Social Security Fund has increased interest on saving with contributors poised to start earning 12.5 percent interest on savings, up from the current 7.5 per cent.
NSSF’s audited financial results for the year ending June 2013 indicates that total assets rose 22 percent from 110 billion shillings to 135 billion shillings.
In order to instill good governance and enhance competitive financial management rules in the public fund manager, the new NSSF Act 2013, replaced the old NSSF Provident Fund and created two new funds, the NSSF Pension Fund which ropes in employees in the formal sector and civil servants, and the NSSF Provident Fund which targets the self-employed and informal sector workers.
The fund has been riddled with controversy including the construction of the 5 billion shillings housing project in Tassia to the recent sacking of two board members, COTU’s Francis Atwoli and FKE’s Jackline Mugo with the matter now before court.
The Fund withered the controversies to grow its assets by 22% to stand at 135 billion shillings from 110 billion shillings recorded in 2012.
This is attributed to governance and financial reforms the Fund has been carrying out over the last five years including outsourcing investment of workers’ contributions.
In a statement Chairman Adan Mohamed says, “The reforms we are currently undertaking have set the NSSF on a firm growth trajectory. The ongoing implementation of the NSSF Act 2013 is the most significant of a raft of reforms that commenced in 2009, and which are now beginning to yield fruit.”
Total investments grew from 110 billion in 2012, to 131 billion shillings in 2013, while contributions stood at 7.8 billion shillings from 7.2 billion shillings.
However, administrative expenses rose by a billion shillings to 6 billion shillings during the period under review.
The Fund’s land and property holdings were valued at Ksh29 billion as at June 2013, down from Ksh35 billion, the previous year.
In addition, NSSF had invested 8.6 billion shillings of contributors’ cash in undeveloped land and plots as at June 2013.
Going forward the Fund aims at boosting workers’ contributions to Ksh120 billion per annum by the year 2019.