NSSF Deserves Our Honest And Constructive Support

Kenyans are fascinating people. They do not respond to logic and reason but to emotion and ethnic congregations. Therefore, as a country, we are having a challenging time moving forward and finding solutions to simple challenges we face as we plan for our future.

It is challenging to do anything positive for Kenyans because they never think about their interests other than those of their inflated emotions. My motto throughout my working period has always been that it is complex but better for one to earn, invest, save, and then spend whatever is left.

It does not matter if one’s needs are met or not. To achieve my motto, the growth of certain habits is not only essential but most critical because it is what defines how our tomorrow will e. The essence of self-discipline and self-sacrifice is to postpone our gratification to such a point when we can meet our necessary needs without a challenge.

I love the quote by one of the most prolific investors of our time Warren Buffet. He once said that “Do not save what is left after spending; instead, spend what is left after saving”. To expound on this, a shilling saved is worth two shillings earned. Kenya is a country with no culture of anything positive, and this is where we need to start having some internal reflections as a country, and the most urgent culture we need to have is one of saving so that we secure our future. This is a personal journey that each of us, irrespective of social, economic, or political status, must engage in and do what we must to ensure that we achieve a better future.

The past couple of weeks, the talk in town has been about NSSF and how to improve it, increase the members’ contributions and ensure that the members’ funds are secure. Following the conversations, one thing has stood out: we have no saving culture to be proud of as a country, and this needs to change immediately. I support the call by the President, H.E Dr. Ruto, that we must find a way to increase the contributions of the members. That we must push ourselves to have a culture of saving that will ensure that for every shilling a Kenyan earns, every other shilling is saved. I love what this call by the President has done to the conversation around the issues of governance, and checks, and balances. Above all, the rightful role of Kenyans in ensuring that they are at the vortex of ensuring their future is secure.

My take on dealing with Kenyans is simple, one must not argue with a fool, for the future will teach him some lessons. It breaks my heart that our dear President challenges us to think better about how we can secure our future. The media owes the public the sacred duty of demystifying the myths about the culture of saving for retirement.

The principles of wealth are true regarding large amounts and small amounts. It all begins with the smallest unit of currency. It is impossible to save peanuts and expect to get millions at the time of retirement. That’s why the President was keen and deliberate when he said that we must increase the contributions of what we save with institutions like NSSF which has achieved significant milestones in the last decades. The media and the public must be aware of what NSSF has been able to achieve and how it has grounded itself in the prudent culture of corporate governance. First, NSSF is anchored in ILO guidelines that embrace government, employers, and workers. This is critical in its management, and the importance of this cannot be overlooked. NSSF assets are managed by licensed and regulated Fund Managers, held by Custodians, and monitored by Actuaries to enhance member returns.

NSSF is the 1st Pillar of Social Security, complemented by Occupational and Individual Pension Schemes. In line with global best practices and Retirement Benefits Authority (RBA) regulations. NSSF has a comprehensive Investment Policy Statement that sets out the objectives of the Fund on how investments are made. The investments are evaluated quarterly while the Investment Policy is reviewed from time to time to align it with current investment trends. Members get peanuts when they retire because we save peanuts to start with. NSSF is not a pyramid scheme where if you save KES 200, you will get KES 200M when you retire. It’s a Fund that operates under laws and regulations enacted through the parliament.

In addition, NSSF is certified on four standards – QMS 9001:2015, BCMS 22301:2019, KMS 30401:2018, and ISMS/IEC 27001:2013, making its operations compliant with international best standards. To ensure transparency in service provision to the public, the Commission on Administrative Justice (Ombudsman) oversights NSSF, scoring performance ratings above 90% for the last five years. This is important to note.

The issue of meager saving is not because the Fund is mismanaged but because we save little to replace our income upon retirement. We must tell each other the truth if we plan to move forward and create any positive change within our borders. The media must call out the flaws in our laws that hold us back from making sound financial decisions. The media must be instrumental in inculcating the culture of saving to the Kenyan people who form the critical mass by making critical decisions lest we become cry wolves when chickens come home to roost. The truth is, life is simple; water will always find its balance.

One key reason why I support NSSF and why every Kenyan of sound mind must save with the Fund is because NSSF has a physical presence countrywide. This brings services closer to its members (present in 47 counties with over 60 branches & all Huduma Centers countrywide). No other pension fund is this accessible. No other fund has embraced devolution to this point that I do not need to travel from Webuye to come to Nairobi and save for my retirement or to collect my pension. No, all I have to do is get to Bungoma and get it. And this is something that we must shout about. This is something that the media must talk about and encourage Kenyans to save more because accessibility is a crucial denominator when one is making financial decisions. To sweeten the deal, NSSF has adopted appropriate technology to enhance service delivery and for ease of doing business. The only remaining thing to this entire conversation is to push for better laws that will see members double or triple what they save. If we want to reap millions when we retire from NSSF, we must have honest conversations on how much we need to protect and ensure that we do what the President has asked us to do.

Sadly, only 3.2 million Kenyans save for retirement, leaving close to 16 million individuals without social security. How can 3.2M in the formal sector take care of over 25M as their dependents if all they are saving is Kes 200 a month? We must save and ensure that we increase the amount of what we are saving. We must rally everyone to save, from that honest house girl in our house to that boda boda who picks your kids from school to that watchman who guards your multimillion property.

The last thing I would like to talk about is that NSSF has embraced technology to ensure that its AGM and every member across the country can join in, ask any question, and feel part of the incredible journey of growing their savings. During the Fund’s 6th Annual General Meeting (AGM), where over 2000 members joined the AGM via online platforms across the country. Outgoing Labor Cabinet Secretary, Hon. Simon Chelugui noted that the strong governance structures at NSSF were bearing fruit. According to the economic survey of 2021, NSSF is the largest pension Fund controlling assets over 18% of the 1.5 trillion pension industry. He further acknowledged that NSSF has come a long way to its current position in the pension industry. The CS noted the introduction of top tier Fund Managers, Custodians, and Actuaries, (all regulated by the Capital Markets Authority (CMA) and Retirements Benefits Authority (RBA) and enhancements in the internal structures have dramatically improved accountability and transparency in the investment decisions at the Fund.

As the country recovers from the COVID-19 pandemic and a toxic political environment, it is essential to note that the National Social Security Fund registered a growth of 14 percent of its member funds from Kes 249 Billion in June 2020 to Kes 284 Billion by June 2021, with an increase of 2.6 million contributing members. These are critical numbers as we discuss how best to manage the members’ funds. NSSF and other pension funds do present a unique opportunity to the country and the people of Kenya in this regard. If we push and adopt progressive laws that focus on financial prudency and leveraged risk, is that the funds can be used to lend to the government for critical development programs in infrastructure, agriculture, and industrialization at a rate above what the CBK would offer for bonds and bills. This will save the country the burden of borrowing from expensive foreign markets and enable the government to leave the local commercial market for the SME sector, hence creating a healthy and proactive environment for business growth. We would do all roads, address housing challenges and educational infrastructure woes with pension funds, and triple the returns for the members. I know, as Kenyans, we hate to think, but it’s time we tried to think just a little bit more out of the box.

Unlike in the past, NSSF is strictly regulated by the RBA like all other pension Funds. This is important as it shows the length and breadth that the NSSF management has gone to ensure the safety of the members’ funds and the prudent investment to increase member returns. Everything is in excess except money; it should be well managed, and we all need NSSF, especially the majority who depend on the informal sector.

Related Content: Will My NSSF Savings Be Enough For Me When I Retire?