Pension-Savings
The Managing Trustee of National Social Security Fund (NSSF) David Koross has assured retirees that in the near future they will be receiving their claims within 24 hours as they are digitizing their systems.
NSSF is leveraging technology in digitizing its process to ensure seamless claims payments and to remove unnecessary bureaucracies that have been the norm for years to the chagrin of retirees.
The Managing Trustee said the fund has grown and they have been able to surpass their target for financial year 2023/2024 as of 31st March. NSSF has raised Sh43 billion against the target of Sh41 billion.
The payment period has been reduced from an average of 18 days to between 10 and 14 days. Last quarter NSSF paid over Sh2.6 billion to over 38,000 claims. “NSSF is no longer the institution which used not to pay. We have now cleared all backlogs on all pending claims and we are dealing with current claims,” said Koross, adding that they will ensure an efficient turnaround in the payment of claims.
He went on, “in the near future we want to ensure that we pay claims within 24 hours. We are digitizing, automating our processes such that Kenyans should be able to get their claims while they are at their own comfort they don’t have to walk to NSSF.”
Koross noted in Kwale during the 20th symposium for the Kenya Association of Hotelkeepers and caterers that the transformation efforts at NSSF will continue unabated to ensure seamless service delivery to Kenyans.
“We are introducing enhanced contributions to 12 per cent of the salary for saving towards retirement,” said Koross adding that they face challenges of unremitted contributions mainly from county governments who owe the fund Sh5 billion. The Managing Trustee further revealed that 83 per cent of Kenyans have no formal pension and only six per cent of retirees above 60 have pensions.
NSSF is on a mission to bring more people on board to start saving for their retirement. The NSSF boss said they are banking of the new NSSF act, 2013 whose implementation started in 2023 after it was halted by court cases to widen coverage and to increase social security benefits that retirees will get.
“Previously, we have been only asking people to save about Sh400 per month and when people retire you retire to about Sh120, 000 – 150,000. We would want to move to a situation where at least when people retire you get a basic income replacement of at least 30 per cent for what you were earning,” he explained.
“We still remain one of the lowest countries in terms of savings. Our savings are still very low, and we want to encourage Kenyans especially the young people who are coming for employment to focus and save,” he added. NSSF has also extended its savings concept to the informal sector through the introduction of a product dubbed Haba Haba where a person can save Sh25 a day and Sh750 in a month.
“It is generally accepted if you save 20 per cent of what you are earning per annum for a period of 20-30 years, you’ll get a retirement saving of up to 60 per cent of your earnings when you retire. That is where we want people to go into,” said the Managing Trustee