The National Assembly’s Public Investments Committee on Social Services, Administration, and Agriculture (PIC-SSAA) directed the National Social Security Fund (NSSF) CEO David Koros to account for Ksh.16 million missing from the Fund.
PIC-SSAA chaired by Emanuel Wangwe, met with Koros on February 28 and delved into the audit queries concerning the financial statements of NSSF for the Financial Year 2020/2021.
The Committee requested the Memorandum of Understanding and contractual agreement related to NSSF’s investment in the East African Breweries Limited (EABL) corporate bond issued in April 2017 prompted by an omission of interest income amounting to approximately Kes. 16 million.
Koros acknowledged the recording of interest earned from the EABL corporate bond in the cashbook on 28/06/2021.
However, the CEO did not provide supporting documentation.
The Committee emphasized the necessity of such documents, emphasizing that investments require formal agreements and urged NSSF to furnish the required evidence.
“I want to get that evidence of your investment with EABL,” said the Chairperson.
Vice Chairperson Caleb Amisi also raised a question regarding outstanding rental debt totaling about Ksh 84 million for two years.
“All the investments are done by the fund managers, all the contractual documents are with them,” responded the CEO.
Besides, Koros addressed the implementation of NSSF’s new contribution rates, effective from February 2024, by recent legislative changes.
The Committee reiterated the importance of prudent financial management to safeguard taxpayer funds, emphasizing accountability and proper utilization of resources.
“What we want from you is to safeguard the taxpayer’s money, we will not allow you to receive our money and misuse it,” said Wangwe.
Also Read: NSSF Clarifies Monthly Deductions After Supreme Court Ruling
NSSF Deduction Petition
NSSF has been in the headlines after a petition was filed at the Milimani challenging the contribution rates.
John Maina Ndegwa, an Advocate, said that the contribution rates were unreasonable citing the already high cost of living.
In December 2023, NSSF announced that beginning February 2024, it will increase contributions to Ksh840 for the lower limit deductions.
The lower earnings limit or the amount that is considered the lowest pensionable salary was raised to Ksh7,000 up from Ksh6,000.
Subsequently, this increased deductions from the current Ksh360 to Ksh 420. The employer will match the contributions with Ksh420.
For the upper earnings limit, or the amount that is considered a higher pensionable salary was raised to Ksh29,000 from Ksh18,000.
This meant that employees will be deducted Ksh1,740, an increase from the current Ksh1,080. Each contribution will be matched by the employer as well.
Also Read: 5 Questions & Answers On New Health Fund Replacing NHIF
Supreme Court Ruling
In a ruling on February 21, the Supreme Court allowed the government to implement the NSSF Act of 2013.
The seven judges led by Chief Justice Martha Koome reviewed a decision that allowed the government to continue implementing the provisions of the Act despite an earlier ruling that it was unconstitutional.
The judges have ordered that the case be heard afresh at the Court of Appeal.
The tussle started shortly after the enactment of National Social Security Fund Act 2013 (NSSF Act 2013) in 2013.
In a statement after the ruling, NSSF indicated that the Supreme Court had not overturned the Court of Appeal’s orders, which allowed the State to continue implementing the contested Act.
Consequently, it reminded Kenyans that employers are still required to remit the Fund contributions in line with the Act.
