Employees are about to increase their contributions to the National Social Security Fund to six percent of their salaries with employers providing another six percent. At present, employees pay a derisory Sh200 per month to NSSF.
The Federation of Kenya Employers wants this phased in over five years but it is a good idea if it can be ring-fenced against government intruders.
In Uganda, employees contribute five percent of their salaries topped up 10 percent from employers. Everyone is happy, especially as employee savings have been growing at 10 percent annually. Retired employees can access all their savings as a lumpsum without delay and without paying any bribe.
The only problem is that the NSSF pot in Uganda grew too big and too attractive. In December, the Labour minister staged a coup and fired Richard Byarugaba, the CEO, on trumped-up charges so that she and others could 'borrow' billions from the NSSF. Byarugaba's crime was to refuse to release employee savings to government.
So the problem is not the NSSF in Kenya – the problem is how do you find a good manager and how do you ring-fence the savings from government?
Quote of the day: "Man only likes to count his troubles, but he does not count his joys."
Fyodor Dostoyevsky
The Russian novelist died on February 9, 1881
