NSSF BIll 2012 Parliamentary Committee retreat
03 July 2013, 11:17
The National Social Security Fund (NSSF) board of trustees is gearing up for a consultative retreat with the National Assembly committee on Labour and Social Welfare in Mombasa, this weekend.
The retreat is one of the last mile engagement forums geared at fine-tuning the draft NSSF Bill 2012 set to be, tabled in parliament in coming weeks.
Speaking in his office, NSSF Managing Trustee, Tom Odongo, expressed confidence that the engagement session with the Labour and Social Welfare committee and other parliamentarians’ led by Chairperson David Were, will provide a platform to discuss and evaluate the NSSF Bill 2012 before its presentation to the National Assembly.
Odongo noted that the draft NSSF Bill 2012 which received the Cabinet’s backing late last year, will provide the necessary legislative foundation to facilitate efforts geared at converting NSSF from a provident fund into a public mandatory pension security scheme.
He added: “If successfully passed through the pending parliamentary process, the bill will facilitate the statutory repealing and replacement of the existing National Social Security Fund Act Cap. 258.”
Featuring a range of enhanced corporate governance structures, the proposed NSSF Bill, will provide enhanced social security products to existing members while increasing social security coverage through comprehensive benefits to all workers in line with the new Constitution and Vision 2030 ideals.
Pension benefits outlined in the bill include: Retirement pension, Invalidity pension, funeral grant Survivors’ and emigration benefits. Under its provident fund, members’ will enjoy tax-exempt: invalidity, withdrawal, emigration, age, and survivors’ benefits.
As currently drafted, the NSSF Bill 2012, corporate governance structures, he said, will be subject to the regulatory oversight of the Retirement Benefits Authority (RBA) and will comply with the provisions of the Retirement Benefits Act subject to specific modifications to cater for its unique benefits offering.
He pointed it out that the draft National Social Security Fund Bill, 2012, had been drawn to address the national social security plight and is not aimed at antagonizing existing occupational schemes that currently cover about 350,000 people excluding public service schemes.
Notwithstanding criticism from occupational schemes and Private pension service providers, Odongo assured that NSSF will seek to incorporate stakeholder views to enable the fund provide an optimum pension cover that meets the needs of all citizens.
Established in 1965, NSSF currently operates as a provident fund providing lump sum benefits only with limited range of benefits.
The NSSF Team Leader expressed regret that due to the current limiting structure, there has been a tendency for lump sum benefits to be poorly applied and squandered by the beneficiaries leading to growing poverty levels amongst senior citizens.
If it sails through, the NSSF transformation bill, will also help mobilise national savings as the rates of contribution to the new Pension Fund will be at 12% of pensionable earnings (basic earnings) split at a 50:50 ratio, between the employee and employer.
Currently, the Transformation bill outlines a range of Provident and pension benefits for its members. Among others, NSSF members will enjoy pension benefits payable under the Pension Fund such as a Retirement and Invalidity pension. Members will also enjoy a range of benefits including Survivors benefit, Funeral grants and Emigration benefits.
Under the provident fund, a member will be eligible for the benefit upon retirement or upon attaining the age of 50 years.
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