Labour Cabinet Secretary Kazungu Kambi wants NSSF trustees charged over loss of members’ funds

Labour Cabinet Secretary Kazungu Kambi. (Photo:File/Standard)

By Jackson Okoth

Kenya: State-owned pensions provider National Social Security Fund (NSSF) may not fully recover more than Sh3 billion. This is the cash that the fund lost through various dubious contracts as well as land purchase deals, executed by past administrators.

A report by the Auditor General shows that pensioners may have permanently lost Sh1.13 billion in cash that NSSF had fraudulently used to buy parcels of land within Karura and Ngong Forests.

These are gazetted areas that cannot be privately owned, possessed, utilised or accessed. NSSF also lost Sh1.2 billion which it had invested in collapsed Discount Securities Ltd to buy shares at the Nairobi Securities Exchange.

The rip-off scheme also involved prominent members of its board. Other leakages include the Sh1.94 billion in outstanding doubtful debts that include Sh251.51 million it invested in the collapsed Euro Bank and unremitted rental income of Sh30.68 million collected from tenants of Viewpark Towers, Nyayo Estate and Bruce House.

The fund also lost Sh64.14 million in the irregular disposal of three plots in Kikambala, Mombasa by awarding this tender to the lowest bidder, who paid Sh633.7 million against the Sh697.8 million, considered the most reasonable price.

The damning audit report on NSSF is happening as pressure mounts for prosecution of those suspected to have been involved in corrupt deals and theft at the Fund. “The NSSF board has been sitting quietly as corrupt transactions take place making workers and employers lose billions,” said Labour Cabinet Secretary Kazungu Kambi in a statement.

“They should actually be charged in court for either criminal negligence, conspiracy to defraud, fraud or even economic crimes.”

Kambi points out that while Government appointees to the board or top managers have always been removed either on transfer or dismissal, those from Cotu and Federation of Kenya Employers — by virtue of their representation, have remained permanently on the board.

The new NSSF Act 2013 intends to convert the Fund from a provident into a pension scheme, pushing up individual contributions from Sh200 to Sh1,080 per month.

Legacy issues that have affected operations of the provident fund will be ring-fenced to ensure no spillover to the new pension scheme.