Four in ten employees of the National Social Security Fund (NSSF) are about to retire, exposing the State-run pension scheme to a major talent crisis.
This is among the major weaknesses that Auditor General Nancy Gathungu (pictured) has raised regarding NSSF's human resource management.
In auditing the fund’s accounts for the financial year to June 2020, Ms Gathungu pointed out that a huge chunk of employees in senior positions is in an acting capacity, some of them for lengthy periods, which may have affected the organisation’s leadership.
The Auditor-General noted that there is the impending retirement of a large proportion of staff. She said that 41 per cent of the people working for NSSF are nearing their retirement age. This could be a recipe for chaos as it might mean hiring a huge pool of fresh talent at once that might slow down NSSF’s momentum.
“Review of employee records indicated that out of the Fund’s 1,261 staff, 41 per cent were about to retire after serving their respective terms. As a result, the fund’s prospectus for maintaining a stable, experienced workforce that would enable it to attain its goals and objectives may be at risk,” she said in her report accompanying NSSF’s financial statements.
Ms Gathungu said a substantial number of managers at NSSF are not holding their positions substantively - resulting in some not offering solid leadership.
Others are demoralised having served in an interim capacity for lengthy periods.
“The senior management team in the year under review included 17 senior staff appointed in the acting capacity for long periods, some for as many as six years. Delay in advertising the respective posts or confirming the acting managers may have constrained their capacity to provide effective leadership,” she said.
NSSF said contributions from members stood at Sh14.7 billion in the period under review, down from Sh15.1 billion over a similar period in 2019. The money paid to retirees also dropped 10.3 per cent to Sh4.43 billion in June 2020, from Sh4.94 billion in 2019. [Macharia Kamau]
NSSF attributed the poor performance to revenue shortfall due to the Covid-19 pandemic that broke out in early 2020 and affected its performance in the months leading to June of the same year.
NSSF’s income from investments such as dividends from its shareholding in listed companies, interest from government and corporate bonds as well as a rental from property however grew to Sh20.39 billion in 2020 from Sh18.23 billion a year earlier.
Over the year, the Fund’s assets grew 6.2 per cent to Sh249.65 billion up from Sh235 billion in 2019.