NAIROBI, Kenya
Social security provider, National Social Security Fund (NSSF) has defended the proposed Transformation Bill, which is facing criticism from a number of stakeholders. In a statement, Acting NSSF Managing Trustee Tom Odongo explained that the draft National Social Security Fund Bill, 2012 Bill, would address the national social security plight and is not aimed at antagonising existing private schemes.
Social security, he said, is important for the well being of workers, their families and the entire community. “It is a means of creating social cohesion, thereby helping to ensure social peace and social inclusion,” he said. “It is an indispensable part of the government social policy and important tool to alleviate poverty. Having been established in 1965, NSSF operates as a provident fund providing lump sum benefits only with limited range of benefits. Due to the current structure, there has been a tendency for lump sum benefits to be poorly applied and squandered by the beneficiaries leading to growingpoverty levels amongst senior citizens.”
The on-going, stakeholder forums, Mr. Odongo said were also a platform to receive formal submissions from stakeholders and regreted that some had resorted to media vendetta against NSSF without reading and understanding the proposals or offering alternative suggestions on how to strengthen the Bill to help Kenyans save and retire in dignity with a reasonable income replacement. “We have received good feedback from a number of stakeholders; we have since incorporated the same in the revised Bill. We will soon publish the revised Bill in the newspapers and Kenya Law monthly so that Kenyans can appreciate that we have addressed a number of their concerns as much as possible,” he said.
The draft bill is principally seeking to convert NSSF from a National Provident Fund into a Social Security (Pension) or (social insurance) scheme. If successfully passed through the pending parliamentary process, it will facilitate the statutory repealing and replacement of existing National Social Security Fund Act (Cap. 258 of the Laws of Kenya).
NSSF research justifying the need for NSSF’s transformation explained had established that only 3.1% of elderly in Kenya above the age of 55 had reported receipt of any pension. Such statistics, he pointed out, confirm the growing need for NSSF to transform into a statutory national pension scheme to stem the growing incidences of poverty amongst the elderly which is currently much higher than the national average incidence of poverty.
Mr Odongo disclosed that, the bill seeks to expand social security coverage beyond the current capacity and it aims to benefit members from the time they join until their exit. Mr. Odongo said the occupational schemes currently cover about 350,000 people only excluding public service schemes. While explaining that the draft bill had been drawn in full consideration of existing private schemes, Odongo disclosed that an opt-out model for schemes meeting specific reference tests had already been incorporated.
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