NSSF boss Omerikwa exits after 7 years at the helm

Anthony Omerikwa

Outgoing  CEO and Managing Trustee of the National Social Security Fund Dr Anthony Omerikwa.

Photo credit: File | Nation Media Group

The National Social Security Fund (NSSF) has picked insider David Mwangangi as its acting Chief Executive Officer (CEO) after the end of the term of Anthony Omerikwa.

Dr Omerikwa exits after serving his full term of three years at the helm of the firm having been appointed as substantive NSSF CEO in November 2019.

Before his appointment, the outgoing CEO had served in an acting capacity for 56 months amid delays by the government to fill the position substantively.

“Today is my last day as the CEO of NSSF and marks a momentous change of leadership in an institution that I have steered with dedication as a team leader for over seven years,” Dr Omerikwa said on Monday.

Mr Omerikwa joined NSSF eleven years ago as a Manager and has overseen a tumultuous tenure at the company that, however, saw NSSF grow its assets from Sh195 billion to Sh290 billion.

“As I leave the Fund, I am a very proud Kenyan for all we achieved in transforming the institution. The Board has appointed David Mwangangi to be the interim CEO and he will be taking over from me as Acting CEO effective November 22, 2022,” he said.

The exit of Dr Omerikwa gives President William Ruto an opportunity to appoint his own man substantively at the helm of the institution which he has placed at the centre stage of enhancing the saving culture of Kenyans.

Increase contributions

Dr Ruto wants to increase monthly NSSF contributions tenfold arguing that the Sh200 monthly contribution to the fund is too low.

The Head of State wants to give workers a pension contribution of a maximum of Sh3,000 per year to the NSSF aimed at encouraging Kenyans to save more in the fund.

Dr Ruto in September said the government will contribute Sh1 against every Sh2 that an employee saves in the fund but capped the saving threshold at Sh6,000 per year to ease the pension burden to the government.

This means a government worker that saves a maximum of Sh6,000 annually in NSSF will get a contribution of Sh3,000 from the government which will boost their savings.

Employees contribute a minimum of Sh200 to NSSF monthly which is usually matched by an equal contribution from their employers translating to a maximum of Sh2,400 annually.

Dr Ruto has complained that savings into the NSSF are insufficient to help retirees in old age and wants to overhaul the pension system to boost national savings.

“There is no retired Kenyan today who is living on their NSSF retirement benefits. The meagre current contribution of Sh200 a month adds up to Sh72,000 over 30 years. There is no rate of return on earth that can grow this into an adequate pension,” said Dr Ruto.

President Ruto’s push for salaried employees to contribute six per cent of their monthly pay up from Sh200 in retirement savings deductions got a major boost early this month after the workers’ lobby group endorsed the proposal.

The Central Organisation of Trade Unions (Cotu) Secretary-General Francis Atwoli said the current National Social Security Fund (NSSF) deduction rate is inadequate and is the lowest in the East African region.

“A person that has worked for 30 years with monthly deductions of Sh200 will take home Sh144, 000 upon retirement, which is not sustainable and exposes them, at old age, to poverty,” Mr Atwoli said in a statement backing the proposals by the President.

Upon implementation of the six percent monthly deduction rate, such a person, assuming they earn Sh50,000 a month, and having worked for the same period, would take home sh2.1 million after an equal top-up from their employer.

While championing the increase, President Ruto said the current rate is too low to build savings that can offer a decent living to workers upon retirement, making his pet project immediately after he was sworn in.

“Today we have savings of maybe Kshs1.5 trillion, which is very small. It is not even a tenth of the savings of Uganda. So we will take you through the motions so that we are all clear because we have no option but to change this country and we are the people who are going to change it,” Dr Ruto told MPs in a parliamentary group meeting in Naivasha.