NAIROBI, Kenya, Feb 6 – Weak data management, questionable investment choices and systemic financial control weaknesses at the National Social Security Fund (NSSF) have left millions of shillings unaccounted for or yielding disappointing returns, according to the Auditor‑General’s latest audit report for the year ended June 30, 2025.
The audit paints a troubling picture of Kenya’s flagship pension scheme, revealing deep‑seated challenges in record‑keeping, investment performance and debt recoveries that risk eroding confidence among contributors and pensioners.
The Auditor‑General’s findings show that the Fund is holding Sh163 million belonging to “ghost contributors” amounts that cannot be linked to identifiable beneficiaries because pensioner records have been lost or are incomplete.
Additionally, Sh81.9 million sits in a suspense account with no clear documentation to determine rightful ownership.
“The Fund was holding retirees’ money amounting to Sh163 million whose ownership could not be established due to loss of pensioner data,” the Auditor‑General’s report states.
“Management did not provide satisfactory explanations for the delay in clearing the balances.”
The report also flagged Sh633 million in pending bills carried forward without satisfactory explanations from management for delays in clearing these liabilities, underscoring weaknesses in internal controls and financial discipline.
NSSF’s investment portfolio a critical engine for long‑term pension sustainability also came under scrutiny.
The audit identified Sh199.4 million tied up in non‑performing assets, while Sh47 million was lost after certain share investments fell by 10.5 per cent in value over the review period.
These losses reflect broader investment challenges, with the Fund struggling to meet its internal return benchmarks.
Independent analyses of earlier audit disclosures show similar issues, including bond purchases at a premium that later generated capital losses and stakes in under‑performing equities, which collectively undermine overall portfolio performance.
The Auditor‑General also highlighted Sh1.08 billion classified as doubtful debts, raising questions about the robustness of credit assessments and recovery mechanisms.
This aligns with earlier audit revelations that the Fund faces significant hurdles in tracing contributions and recoveries, especially from defunct employers and unremitted contributions.
The slow pace of tracing exited members and collecting outstanding contributions not only weakens NSSF’s revenue base but also delays benefit payments to retirees entitled to those funds.
While the audit stops short of alleging fraud, its findings signal systemic shortcomings in data governance, investment monitoring and financial oversight areas essential to safeguarding retirement savings for millions of Kenyan workers.
Regulatory and oversight bodies, including Parliament’s Public Investments Committee and the Retirement Benefits Authority (RBA), have previously urged reforms to strengthen governance at the Fund.
In past audits, legislators have called on NSSF to modernize its member data systems to reduce the incidence of unallocated funds and improve tracking of contributors.
NSSF is the cornerstone of Kenya’s formal sector retirement savings, and any erosion in performance or transparency can have far‑reaching implications for workers who depend on it for financial security in old age.
The latest audit adds to a growing chorus of calls for tighter accountability and improved risk management at the institution.
