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NSSF penalises employers Sh2bn for late remittances
Workers erecting a sign at NSSF's Social Security House offices in Nairobi.
The National Social Security Fund (NSSF) penalised employers Sh2.3 billion for delays in remitting workers’ pension contributions by the end of December 2024, even as the total unremitted deductions hit Sh26.9 billion.
NSSF recovered the penalties in renewed efforts to pursue employers holding huge debts, following pressure from Parliament.
“The amount recovered in penalties as at December 31, 2024, was Sh2,345,495,492,” Auditor General Nancy Gathungu said in a report quoting the fund.
The report also observes that employers owing the NSSF Sh909 million closed shop, including defunct local authorities that went down with Sh895.5 million.
The NSSF has sent demand notices to employers holding unremitted contributions amounting to Sh1.83 billion, the report adds.
By June 2023, the NSSF was owed Sh26.9 billion by employers, a previous audit observed.
NSSF management said most of the unremitted contributions are owed by ministries, counties, and defunct municipal councils.
“The amount recovered as at December 31, 2024 was Sh155,149,195 while the amount under instalment undertaking was Sh7,995,806. Employers owing Sh8,878,288 are under liquidation/receivership,” the Auditor-General report noted.
This refers to the principal amounts owed and recovered and is different from penalties.
The report, however, blames the NSSF for not instituting adequate measures to collect unremitted pension contributions, warning that part of the debt would be unrecoverable.
“The recovery rate is quite low and recovery of some will be remote as they relate to defunct local authorities,” Ms Gathungu warns.
Besides unremitted contributions, the follow-up report also tracked the payment of benefits to some 19,623 Kenyans who exited the fund, but the majority of whom have never been paid.
The NSSF said that 952 of the members were traced in the last two years and Sh20.3 million owed to them was paid, leaving a balance of Sh158.48 million by the end of June 2024.
“Details of the remaining 18,671 have been mapped and distributed to regions and branches for tracing of members,” the NSSF is quoted in the report as having responded.
The National Assembly’s Public Investments Committee in a report adopted in June 2024 recommended that NSSF’s Managing Trustee ensure recovery of unremitted pension contributions “through aggressive follow-ups”.