Why Kambi sacked Atwoli from NSSF

The fight to control the vast infrastructure projects and assets of the National Social Security Fund (NSSF) could be behind the ouster of the workers’ and employers’ representatives from the board of trustees.

Labour Cabinet Secretary Kazungu Kambi on Friday announced the retirement of the Federation of Kenya Executive Director Jacqueline Mugo and Cotu Secretary-General Francis Atwoli on grounds that they had served beyond the six-year limit.

According to Mr Kambi, his decision was informed by the new NSSF Act, which limits the trustees’ stay on the board to two terms of three years each. However, the Act only came to effect in January 2014 with provisions in its transitional clauses that the board members under the previous legal regime were to serve out their full terms.

Speaking yesterday, Ms Mugo termed her removal from the NSSF board as “unprocedural, ill-advised and malicious”.

“We are particularly disappointed that this announcement comes after a meeting between the Cabinet Secretary and members of the FKE management board where we agreed to work better, together,” said Ms Mugo.

But behind the scenes a vicious fight is brewing with the government appearing intent on appointing loyalists to the board. At the moment, FKE and Cotu have automatic representation on the board, something the Sunday Nation learnt the government, through the Labour Secretary, has opposed.

According to sources, Mr Kambi wants to have the Public Service Trade Unions of Kenya (Pusetu-K), which is seen as a government creation meant to eat into Cotu’s position, on the board.
In addition, there are also claims the government wants another employer organisation other than FKE to ascend to the board of trustees.

“The appointment of directors to the state corporations is usually political and that is the same thing the government wants to do with NSSF. But in the absence of FKE and Cotu from the board of NSSF, the government will be simply talking to itself on the management of the workers’ pension scheme,” a source told the Sunday Nation.

In addition to control, NSSF is also implementing huge infrastructure projects over which the government wants to take full charge. Among them are the Sh7.1 billion Hazina Towers, Kilimani Flats and the parking lot at NSSF.

Want full control

In addition, NSSF is also involved in infrastructure projects at the port of Mombasa. All these projects involve billions of shillings over which certain individuals in government want full control. Mr Atwoli and Ms Mugo have recently opposed some projects like the Sh5 billion development in Tassia.

In addition, with the enactment of the new NSSF Act, the fund will grow significantly from the current Sh150 billion it controls.

Workers and employers countrywide were due to start paying increased rates to NSSF from June. However, the revised contributions never took effect when both went to court over differences with rates and procedure. Under the new rules, employers and their workers were each expected to contribute 1.2 per cent of the scheduled deductions on their pensionable earnings in the first year.
But the two opposed the implementation of the new scheme.

And Mr Kambi hinted to that in his reasons for removing Ms Mugo and Mr Atwoli from the board. According to Mr Kambi, Mr Atwoli and Ms Mugo have been working at cross-purposes with the rest of the board.

However, some board members said the government has been looking for an opportunity to remove the two to remain with trustees who owe their allegiance to it by virtue of appointment and are amenable.

“This is just an extension of the same things Mr Kambi has been doing, propping up Pusetu against Cotu and he wants to extend the same to FKE. He has never forgiven Mr Atwoli and Ms Mugo for opposing the Tassia project. And Mr Kambi is working with a faction in government to do these things,” the board member said.

“He doesn’t respect the tripartite arrangement we have at NSSF. It is all power games and fight for control of NSSF’s vast assets,” the board member added.

Soon after Mr Kambi announced the removal of the workers’ and employers’ representatives from the NSSF board, the FKE chairman, Mr Linus Gitahi, wrote to him condemning the action.

Addressing the media yesterday, Ms Mugo disclosed that the FKE board will be meeting tomorrow to decide its next course of action, including demanding the revocation of the Gazette notice kicking her and Mr Atwoli out of the board. In the extreme scenario, Ms Mugo said FKE was also open to taking legal action against Mr Kambi.

“The Cabinet Secretary has disregarded the wishes of employers and the agreement reached with him to conduct labour relations in a spirit of mutual respect and dialogue. He cannot continue running the affairs of NSSF through the media,” said Ms Mugo.