Counties owe NSSF Sh2.7 billion in pension liabilities

 

When NSSF's immediate Acting CEO David Mwangangi handed over the reign of the Fund to the newly appointed CEO Tito David Koross during a ceremony presided over by the Board of Trustees Chairman at the NSSF Head Office, Nairobi. [File, Standard]

The National Social Security Fund (NSSF) is owed Sh2.7 billion in pension liabilities by county governments across the country.

NSSF Managing Trustee David Koross told the Senate County Public Funds and Special Funds Committee that the fund is also owed Sh1.8 billion by defunct local authorities.

Koross said they have been making a follow up on outstanding contribution debts owed by county governments through engagements and sensitization forums by NSSF field offices located across the country.

“Various engagements have been held with the intergovernmental Relations Technical Committee on recovery of contributions debts owed by defunct local authorities, we call on the Senate to support us to ensure that we are able to recover this debt,” he said.

To address the issue of non-remittance of contributions by county governments, he proposed the issuance of NSSF compliance certificates to county government prior to disbursement of funds.

Koross proposed the reconciliation and validation of amounts owed with respect to defunct local authorities and prompt submission of accurate and complete returns and provision of payroll information to NSSF officers undertaking routine compliance activities.

The NSSF boss said that no county government has instituted a payment plan in recent months to clear outstanding contributions, despite being given priority on payment of contribution arrears and penalties whenever they receive annual disbursements from the National Treasury.

The Committee Chairman Godfrey Osotsi promised to support legislation to make it compulsory for employers to remit NSSF contributions to the fund as required and measures to deter the defaulting of payment.

“The Senate is going to support the National Social Security Fund to be able to get all the pension liabilities owed to by county governments and other defaulters, we are going to support any legislation that will be brought to the house to make the fund work easier and within the law,” said Osotsi.

Kenya Revenue Authority (KRA) Deputy Commissioner Esther Wahome told the committee that once an employer has failed to remit contributions the NSSF may with the approval of the Retirement Benefits Authority (RBA) appoint the authority as an agent, to collect unremitted contributions, interests and penalties.

Wahome told the committee that the trustees shall in writing request the authority for approval and shall demonstrate that they have taken all reasonable effort to recover unremitted contribution from a defaulting employer without success.

She revealed that KRA had held engagements with the RBA and agreed that collection of unremitted pension contributions is viable by way of agreement with the Trustees of the pension schemes.

“However, it was noted that the legal provisions still had shortcomings that could not enable collection in the manner envisaged and as such there was need to further enhance the provisions of the Retirement Benefits act and to amend the KRA act, which RBA was to pursue,” said Wahome.

The KRA Deputy Commissioner said that the county pension schemes can engage the RBA to fastrack legislative amendments proposed by Kenya Revenue Authority to facilitate collection of unremitted pension contributions on behalf of the pension schemes.