NSSF in new plan to expand into Sh1 trillion scheme in five years

When the National Social Security Fund's immediate Acting CEO David Mwangangi handed over the reign of the Fund to the newly appointed CEO Tito David Koross. [File, Standard]

The National Social Security Fund (NSSF) has started implementing an ambitious new plan, which is expected to see its fund value hit Sh1 trillion by 2027.

This will be a 221 per cent growth from a value of Sh311 billion reported over the 2022-23 financial year. 

In the new strategic plan for the period between 2023 and 2027, NSSF also plans to increase the number of Kenyans saving for retirement with the fund to 5.2 million, a growth of over 70 per cent from three million members as of 2023.

Annual contributions are expected to grow to Sh134 billion by the end of the plan period, a significant jump from Sh26 billion that NSSF members contributed in the year to June 2023. 

Informal sector

The growth in the Fund’s numbers will largely be driven by Kenyans working in the informal sector, who largely remain excluded from savings for retirement, as well as those working in the diaspora. 

“This strategic plan is a broad roadmap that will help NSSF address emerging issues such as inclusion of workers in the informal sector and the diaspora in social security,” said NSSF Board of Trustees Chairman David Kariuki on Tuesday at the launch of the strategic plan. 

“This plan addresses the realities of Kenya’s workforce landscape where 83 per cent are in the informal sector. It is a game-changer allowing us to extend coverage to this vital sector.”

Managing Trustee David Koros said the strategic plan aims to address the issues of poverty as well as reduce the number of Kenyans locked out of social security.

According to data, 84 per cent of Kenyans do not have social security, condemning them to poverty in retirement or being forced to continue working past retirement age. 

“This is why we come in as NSSF to provide an anchoring to social security that is required. It has the mandate of ensuring that we have a reasonably reliable social security system,” said Mr Koros.

“We are targeting to become a Sh1 trillion fund by 2027.”

He said the strategic plan addresses the concerns of NSSF’s key stakeholders. 

“This strategic plan has a value proposition to the members. We want to ensure that our members get competitive returns and get a comfortable retirement,” he said. “We also want to assure employers that we have a cost-effective scheme. We have plans to drive down the cost of administering this scheme.”

Mr Koros said NSSF wants to be a fulfilling workplace for the employees and partner with the government in the socio-economic development of the country. 

He added that the Fund is addressing the challenges it has experienced in the past, including delays by members in accessing their retirement benefits upon retirement, which has eroded confidence among Kenyans. 

“NSSF has been known not to pay claims for up to one year. You have heard the stories of how long Kenyans have had to wait for NSSF claims. We want this to be a thing of the past,” said Mr Koros.

“We will provide a turnaround time within a day by the end of this strategic plan. We want when you claim your benefits, we should be able to pay within 24 hours. If you make your claim on Tuesday morning, you should have your money on Wednesday morning.”

Prime Cabinet Secretary Musalia Mudavadi noted that NSSF’s impact goes beyond the pension industry, having investments across different sectors. He, however, urged NSSF to increasingly play a bigger role in pushing pension coverage, which is currently the lowest in the region. 

“Beyond its function of mobilising local resources for national development, NSSF invests in productive sectors such as support for SMEs, championing financial inclusion and reinforcing the stability of our financial system,” he said.