NAIROBI, Kenya, Nov 2 – Shocking revelations have emerged that devolved units across the country owe the National Social Security Fund (NSSF) a staggering sum of Sh 2.7 billion in unpaid pension liabilities.
Similarly, defunct local authorities are in arrears, owing NSSF a substantial amount of Sh 1.8 billion.
During a Thursday session of the Senate County Public Funds and Special Funds Committee, NSSF Managing Trustee David Koross appealed to the senators for support in their efforts to recover these outstanding contribution debts owed by county governments.
The NSSF is currently undertaking a comprehensive effort to pursue the unpaid funds, employing various means such as engaging with stakeholders and organizing sensitization forums on the National Social Security Fund through its field offices located across the country.
Koross expressed concern that no county government has initiated a payment plan in recent months to settle the outstanding contribution dues. He explained that the delay in recovering these debts is partly due to county governments prioritizing the payment of contribution arrears and penalties whenever they receive disbursements.
To ensure compliance and address the issue of non-remittance of pensions, NSSF is recommending the introduction of a requirement for the issuance of compliance certificates to county governments before the disbursement of funds.
Committee Chairman Godfrey Osotsi pledged the Senate’s support in legislating mandatory employer compliance with NSSF contribution remittances, emphasizing the need for measures to deter defaulting payments.
“The Senate is going to support the National Social Security Fund in retrieving all the pension liabilities owed by County Governments and other defaulters. We will back any legislation that streamlines the fund’s operations in line with the law,” said Osotsi.
Previously, the Kenya Revenue Authority (KRA) had highlighted that NSSF could engage their services to ensure employers remit contributions to the fund without fail. Deputy Commissioner Esther Wahome of KRA informed the committee that, with approval from the Retirement Benefits Authority, NSSF can designate KRA as an agent responsible for collecting unremitted contributions, along with accrued interests and penalties.
KRA and the Retirement Benefits Authority had held discussions and concurred that the collection of unpaid pension contributions could be achieved through agreements with the trustees of the pension schemes.
However, both KRA and the Retirement Benefits Authority recognized that existing legal provisions had limitations that hindered effective collection, thus requiring further enhancements to the Retirement Benefits Act and amendments to the KRA Act.
These collaborative efforts aim to bolster the recovery of these pension liabilities, ensuring that contributors receive the benefits they are entitled to while promoting financial sustainability in Kenya’s pension system.
