The inconsistencies now familiar with the National Social Security Fund must be confronted and solved once and for all. The ruckus about reconstituting the NSSF board of trustees is threatening to distract it from its key mandate. The fund exists to fulfill the right to social security, as provided for under Article 43(e) of the Constitution.
While the government has no single penny in the NSSF, it cannot wish away its cardinal role as guarantor of the public. It is, therefore, in its interest to ensure that the NSSF functions optimally because, should the fund collapse under its watch, it will have to move in to rescue it, albeit at a huge cost to the taxpayer.
Inculcating good governance, integrity, transparency and accountability at the NSSF is urgent. As a matter of fact, if the process and qualifications of trustees were anchored in law and premised purely on merit and professionalism, representation as currently practised would be unnecessary.
The NSSF Act 2013 sets a very low standard for workers’ and employers’ representatives on the NSSF board.
Knowledge in representing employees and employers is in itself not enough in bringing the right skillset to the fund. At the minimum, they must be subjected to the same requirements as the three independent trustees among whom the chairman is supposed to be elected: Knowledge and experience in administration of scheme funds, among others.
If the representative organisations lack those competencies within, they must recommend from without for appointment.
The tripartite (representatives of the government, workers and employers) principle upon which the NSSF is managed remains relevant to the extent that workers’ funds are protected through prudent investment that guarantees them quality benefits at exit.
The contributions are from both workers and employers but, in the sum total of things, the funds belong to workers.
The NSSF board has fallen short of its responsibilities as encapsulated under Section 10 of the Act — such as exercising care and skill, due diligence in the conduct of the affairs of the board and enforcing good governance practices within the board and senior management.
The tool of accountability to the members of the fund is missing or rarely applied. The annual general meeting(AGM) only happens as an afterthought. This would be the right forum, especially in electing qualified workers’ representatives after vetting and approval by Retirement Benefits Authority and other agencies.
The NSSF is a majority shareholder in National Bank, Consolidated Bank and East African Portland Cement, among others. What is the common thread in these firms or their boards? Why do they seem to be in turmoil?
How does this portray the NSSF board of trustees? What skills and competencies or governance mannerisms is the NSSF transferring, or exporting, to its affiliates? Is it by design or pure happenstance? Is there a plausible explanation? What are the underlying issues? Or is it a case of contamination by association?
This state of affairs is inexcusable for an organisation with a lot of capacity but is causal in its responsibilities and yet so much more is at stake. The situation is unsustainable. If the NSSF is perpetually slapped with astronomical contractor claims, there is real risk of loss of money at the expense of fund members’ welfare.
The Cabinet secretary for Labour and Social Protection must move with speed and stamp his authority by causing restructuring of the NSSF to become a truly world-class provider of social security and ensure it lives by its tagline of “Growing you for good”.
Mr Wasike is a procurement specialist and governance expert. [email protected] Twitter: @ChrisMWasike