Put in place policies to cushion retirees
After decades of doom and accusations, some good news is at long last coming from the National Social Security Fund (NSSF).
Going by reports attributed to the Central Organisation of Trade Unions Secretary General Francis Atwoli, NSSF could be on the path out of the doldrums.
Since the implementation of the NSSF Act 2023, the national social insurer has improved its monthly collections by almost 500 per cent, from Sh1.7 billion to Sh5.7 billion.
Since ascending to State House, President William Ruto made reforms at NSSF as one of his top priorities by proposing a national savings drive to encourage those in the informal sector to set up retirement saving plans with the government offering to contribute Sh1 for every Sh2 saved in the scheme and up to a maximum of Sh6,000 a year.
Increment in the social security contributions is a much-needed reform, as truth be told, in the current economic times where the cost of living is skyrocketing, living off NSSF pension benefits has not been sustainable.
Kenyans’ saving habits trail behind other countries. This could be attributed to factors such as low income, lack of jobs and even distrust in funds management.
Low income makes it difficult for Kenyans to increase their savings from the current minimum contribution.
As efforts to enhance social protection continue to draw debate, we need to be mindful of the key challenges that need to be addressed.
The lack of a social protection policy that ideally should guide NSSF, easy access to information, fiscal sustainability of the retirement benefit schemes, accountability of the retirement benefit schemes , accountability and transparency should all be addressed as a matter of urgency.
Previously, NSSF has been used as a cash cow for politicians with the workers’ money being used for campaigns and other political expediencies. Many at times, Kenyans have witnessed NSSF investing its money in white elephant projects that are of no benefit to workers.
Ideally, as Atwoli and NSSF honchos bask in the glory of increased collections, they should put in place strategies and measures to adequately cushion retirees in their sunset years.