Pension fund bets on data audit to quicken payouts to retirees

The building that houses NSSF headquarters in Nairobi's Upper Hill. [File, Standard]

The National Social Security Fund (NSSF) is for the first time set to undertake a massive audit of its paper-based beneficiaries' database for verification purposes.

The move is aimed at fast-tracking pension payouts for thousands of retirees and their beneficiaries.

The State pensions agency has invited fingerprint experts to help it digitise and audit its huge trove of paper files gathered over decades and lying in its offices.

The NSSF says those hired will help with cleaning up the data of registered NSSF members for the purposes of faster benefits processing.

NSSF, which has been on the spot for delaying the payment of retirees' life savings sparking massive complaints from pensioners, reckons that the latest move will also help it enhance transparency.

"The National Social Security Fund (NSSF) is seeking to engage qualified fingerprint technicians on a temporary basis for a data cleaning project that will take six months," said the NSSF in internal documents.

"The job will entail positive identification of members/beneficiaries to initiate benefit processing and payment."

NSSF's pension payroll has been soaring in recent years on the back of a fast-ageing public service, piling pressure on taxpayers amid delays in implementing reforms in the past.

Pension and gratuity payouts grew 32 per cent to Sh145.6 billion in the fiscal year that ended June compared with Sh110.3 billion in a similar period a year earlier.

NSSF announced four years ago that it would no longer accept physical or manual returns for employee statutory contributions.

It also warned at the time that thousands of retirees are suffering while trying to claim their pension from the NSSF due to failure by their employers to list their names while remitting deductions.

According to NSSF, the Teachers Service Commission (TSC) was at the time one of the top culprits that have been sending money to NSSF accounts without the names of the contributors and the amounts they are deducted condemning many retired teachers to an agonising wait for their pension dues.

This made it difficult for the members to claim their benefits, said NSSF.

The National Treasury earlier said it will roll out, a much-awaited re-engineered pension management system to boost pension management and processing.

"The system will offer an end-to-end Enterprise Resource Planning solution in the management and processing of pension benefits," said Treasury earlier.

The Treasury said at pensioners and dependents had crossed 300,000 in December 2021, and that the number was expected to continue growing.

Public servants, unlike workers in the private sector, were not contributing to their pension until January 2021. Their retirement benefits are paid straight from government revenue, largely taxes.

The Treasury rolled out a contributory pension scheme in January 2021 where public service workers contributed two per cent of their gross pay towards retirement savings in 2021, rising to five per cent in 2022 and 7.5 per cent thereafter.

The government contributes 15 per cent of the gross pay.

Under the Public Service Superannuation Scheme (PSSS), workers who resign from public service are entitled to pension benefits after five years with no age restrictions.

This is unlike the previous scheme where it took 10 years from the time a worker resigned from the government to get benefits or on the attainment of the age of 50.

Civil servants are free to increase their contributions to a rate above 7.5 per cent, but the government share remains intact.

The rollout of the contributory retirement plan, after a delay of more than eight years since the Public Service Superannuation Scheme Act became law, is expected to ease pressure on taxpayers.