NSSF to divest from land investments in favour of securities

Hon. Gideon Ndambuki chairman NSSF during the 3rd Annual General Meeting on 5th August 2016. PHOTO:WILBERFORCE OKWIRI

National Social Securities Fund (NSSF) plans to divest from land investments and put more money in government securities and private equity to mitigate loss of funds.

Investing in land has exposed the fund to land grabbers who prey on property investments at a great cost to contributors,  NSSF Board of Trustees Chairman Gideon Ndambuki said.

“NSSF has been a victim of the land grabbing disease. Let us move from investing in land. If we have extra resources, we would rather invest in government securities than to put our money where it has been misused,” said Ndambuki.

Speaking on Friday during NSSF Annual General Meeting in Nairobi, Ndambuki added that the fund’s 2.3 million active members, the board wants to diversify the investment portfolio to give members value for their contributions. He said the board would reclaim, secure and develop all the properties owned by NSSF even if they have been registered as private property.

Commenting on Nairobi’s Tassia plots, Ndambuki denied that members’ contributions had been lost. “We have collected Sh2.2 billion and we have Sh300 million to go. We expect to collect it and once we do that, we will be at no loss,”  he said.

Acting Managing Trustee Anthony Omerikwa said the NSSF wants to use fund managers and financial advisors to identify investment that can maximise returns. He said the firm was considering private equity. “We are very conservative. Our risk appetite is not as that of normal pension schemes. We are looking at very many private equities. We have gone through a rigorous appraisal exercise of some, but we have not zeroed in on any yet,” explained Omerikwa.

The Principal Secretary in Ministry of East African Community, Labour and Social Protection, Dr Khadijah Kassacho, decried the poor saving culture. 

She  said that because most of Kenyans were not saving enough for their retirement, dependency ratios have continued to rise with 47 per cent of population now living below poverty line. She put the spotlight employers who were not submitting employee contributions to the fund.

“The asset value of pension funds is at Sh814 billion with Sh172 billion under NSSF. With improvement of personal contribution,    the industry will grow bigger,” said Ms Kassacho.

During the meeting, financial statements for the year ending June 30, 2015 were not given to members. Ndambuki explained that they were yet to be cleared by the office of Auditor General. However, Alexander Forbes CEO Sundeep Raichura, whose firm is the actuary of the fund, said that Sh107 billion had been invested by external managers by end of March 2016.

Government securities such as treasury bills and bonds accounted for 26 per cent of the investment while property took 20 per cent. Investments in equity took 38 per cent of the funds. Mr Raichura said that since 2000, NSSF has been pulling out of property investments as it diversifies its investment options. In 2000, the fund had put 80 per cent of its investment in property but that has been reduced significantly.

“There is no reason why this money should not be used to build Kenya,” added Raichura.