Agony of pension contributors condemned to delays, peanut payments in retirement

An elderly person saves money in a piggy bank in a small pension concept. [Getty Images]

After 26 years of service, Kimaru Maina retired as a county government worker in 2019 and he has been trying to adjust to life outside employment.

At the time of retirement, he was the respected secretary of the Nyeri County Government Workers Union. However, he was in for a rude shock when he started the process of seeking his retirement benefits.

He believed he had invested heavily for his retirement by saving with the National Social Security Fund (NSSF) and had been hoping to use his savings to guarantee a peaceful life.

"I had been saving with the Laptrust and before that for about 10 years, I was saving with the National Social Security Fund. When you are in Laptrust you stop deductions for NSSF," Maina said.

Like most pensioners he put in his applications to withdraw his benefits from NSSF and was promised they would be processed as soon as possible.

However, what was supposed to be a week turned into months. For a start, Maina believed the wait was worth it and the belief that his savings would soon grace his bank accounts.

Then the big shocker came! He had only earned a paltry Sh8,000.

"I was so shocked that after decades of saving I only got Sh8,000, and I wonder how that lumpsum will support me and my family in retirement," he said.

Maina feels that while this amount is too little, he was lucky as he was able to benefit from the Laptrust pension scheme, which pays off a small amount per month to sustain his family.

The retired civil servant is among several pensioners who retire with high hopes of having their future secured through their savings in NSSF, only to receive peanuts.

For some, even the peanuts are yet to be credited to their accounts despite making several trips to the institution's offices to pursue their savings.

Odd jobs

Maina said unlike other pension funds, the NSSF monies paid out are too little to benefit the pensioners.

For years he had worked at the county government towards a peaceful retirement, but now he has to find odd jobs and keep a small business to sustain his family.

His colleague from Mathira Constituency, Joseph Mwangi, was not as lucky as Maina.

After working for 29 years, Mwangi contributed to NSSF throughout this period, but his payment was just a disappointment.

"I waited for three months, I was saving with Lapfund, which still deducts NSSF, so I expected I would receive a lumpsum from NSSF but it was less than what I expected," he said.

Mwangi declined to reveal the exact amount, only saying it was between Sh10,000 and Sh15,000.

He said NSSF money is easier to process compared to other pension funds, but the amounts are too little and have no value to a pensioner living in this economy.

The two men said one of the challenges for retirees is maintaining a lifestyle they had when employed on the pension payments.

"If you retire without a plan hoping that you will get money from pension funds, you might be disappointed, it is better to find other investments to support your retirement," Maina said.

The same tale mirrors across several retirees in Nyanza and Western, who say the money they have received from NSSF is an insult to their several years of savings.

This is the case of Fredrick Owuor, a retired teacher who served for 30 years and had been contributing to the entity to prepare for his retirement.

When he retired in 2014, he was looking for a peaceful life in retirement at his home in Rangwe, Homa Bay County.

He had little to worry about. After all, he had already achieved most of his earthly desires and had even built his home and educated his children.

Owuor had invested ahead of his retirement and was looking forward to receiving his pension from his employer, the Teachers Service Commission (TSC) to compliment what he believed was a boom from NSSF.

However, his high hopes were dashed in January 2016 when he received his NSSF savings.

"I was shocked beyond measure. For the several years I was saving, I only had Sh12,000," said Owuor.

He believes there was a problem with the calculations, saying the amount he received was too little to live on.

"When you are seeing statements of your monthly deductions, you believe you will receive a huge amount at the end of it all. It is really surprising what NSSF pays you at the end," he says.

Owuor said he used the money to buy food for his grandchildren.

"Sh12,000 for 30 years was a big shocker for me," he said.

In the region, several retirees who worked for private and State-owned firms said they were shocked when they learnt that their NSSF deductions was never remitted.

A number of former employees of sugar factories in the region say they are yet to receive their savings more than 10 years after they retired.

This is the case for Maurice Yegon, a former employee of Muhoroni Sugar factory, who says he is yet to receive his NSSF contributions even after he retired in 2018.

He is among several former workers who are still pursuing their savings.

"I have tried getting my NSSF savings but I am yet to get a breakthrough. I was informed the money that was deducted from my salary was never remitted to NSSF," said Yegon.

Attempts to get a comment from the factory were futile.

The Secretary General of the Kenya National Federation of Sugarcane Farmers, Charles Atyang, said up to 2,000 of their members are yet to receive their NSSF contributions.

"We have had problems. Some of our members have been pursuing their NSSF contributions but apparently some of the State-owned millers never remitted their deductions to NSSF," said Atyang.

He said some of the members have died while waiting for their NSSF pension funds while others have now given up the chase.