Musalia Mudavadi cautions Uhuru over NSSF Bill

Former Deputy Prime Minister Musalia Mudavadi. (Photo:File/Standard)

By Lonah Kibet

Nairobi, Kenya: The Amani Coalition leader Musalia Mudavadi has asked the government to “play smart” in handling the national pension fund contributions in order to safeguards public monies under the proper legislations.

Mudavadi has advised President Uhuru Kenyatta to allow for a thorough scrutiny of the National Social Security Fund (NSSF) Bill before assenting to it to avoid plunging the country into financial chaos.

“There are clauses in that Bill that are not quantified in demographic sense. The way it is structured, it could easily be a government running a pyramid scheme. I urge the president to let experts give the Bill an actuarial audit before assenting to it”, said Mudavadi.

He added:  “I hope we are not increasing contributions to plug holes in the current budget. That will be disaster given that pensioners are increasing. The Narc government postponed the problem by increasing retirement age to 60. There are now more people going on pension and we must prepare prudently for them.”

He warned that pension funds were sensitive to a country’s economy and any misapplication could bring distortions and the government down.

“Let’s not allow for situations where pensioners outnumber ability to service them because money is tied up in dud investments like before”, he said.

Citing cases in Europe where pension funds were squandered leading to fall of governments, Mudavadi said revolutions in the former Soviet Union satellite states were sparked off by inability to manage pension funds.

“There has been a misconception that these governments collapsed due to the end of the ideological Cold War. But underlying the collapse was a terribly mismanaged pension system,” the former deputy Prime Minister pointed out.

He said that since the Bill amounted to making NSSF a savings bank for Kenyans, it is not enough to promise investment will be in projects with handsome income.

“Tell the shareholders where their money is going to be invested and what the returns and interest earned will be to them”, he said.

Mudavadi was speaking Monday at a breakfast debriefing of Amani Coalition Professional Caucus on resolutions reached at a party retreat over the weekend.

UDF issued a communiqué stating that it was keen to protect the interests of workers and their benefits in retirement.

“The recent amendments to the NSSF Act raise serious questions on the past use of workers funds. Increasing contributions without outlining and cleaning the investment portfolio is suspect. History of NSSF is of funds lost in dubious projects. We need the workers to be told where their money is going to be invested’, it said.

Mudavadi reiterated the need for a clear and known investment programme, projection of returns and interest accruing to contributors under the NSSF Bill.

“Contributors mainly workers must know where there money is going to be invested and whether it is prudent investment to avoid incidences of the past where ‘political investments’ led to loss of billions in collapsed institutions and useless land parcels’, he said.