NAIROBI, Kenya – The National Social Security Fund (NSSF), the state agency tasked with safeguarding the retirement savings of millions of Kenyan workers, is bleeding billions of shillings through mismanagement, wasteful spending, and questionable investments, a new audit reveals.
In a report tabled by Auditor General Nancy Gathungu, the NSSF is accused of systemic financial impropriety that could undermine the very savings meant to support retirees. The audit covers the year ending June 30, 2024.
Among the most troubling findings is a Sh12 billion bond trading blunder, where the Fund bought government bonds at a premium but sold them at a loss—decisions Gathungu said lacked prudence and failed basic investment due diligence.
“Some bonds recorded high capital losses, and the yield rate was minimal,” the Auditor General said. “Management did not compare the high capital losses with the yield rate for each bond.”
The report lays bare a pattern of reckless spending, with inflated procurements that defy logic.
A single reception desk cost taxpayers Sh2.08 million, while an eight-bay bulk filer was acquired at Sh1.04 million—both lacking justification.
Worse still, NSSF lost Sh115 million in a controversial land deal in Nairobi’s Upper Hill after the title deed was revoked.
Another Sh209 million was lost through a failed investment in a local bank, while quoted shares worth Sh127 million were flagged as non-performing.
In Kisumu, an NSSF-owned commercial property valued at Sh228 million was found to be operating outside regulatory guidelines, adding to the agency’s growing list of underperforming or idle assets.
In Nairobi, prime real estate worth Sh4 billion lies dormant, earning no returns.
The audit also raises questions about accountability and governance.
Trustees received Sh68.7 million in allowances—well above the legally permitted threshold—after holding 14 full board meetings and nine committee sessions, almost four times the approved limit.
The agency further spent Sh317.5 million on meetings, travel, and accommodation, including Sh11.3 million paid to conference facilities procured without competitive bidding.
Meanwhile, the Fund’s staff loan book remains in disarray. Over Sh1.3 billion in staff loans remains unpaid, including Sh158 million in mortgages, with no visible recovery plan in place.
Gathungu also flagged suspicious cash purchases, including Sh3.2 million worth of fuel acquired outside standard procurement procedures.
Renovation projects totalling Sh410 million lacked transparency and documentation.
Adding to the alarm, the report revealed the NSSF failed to claim Sh940.3 million in tax refunds and set aside Sh946.6 million in doubtful income—pointing to broader operational and oversight failures.
Despite setting a target of 15 percent return on investments, the fund only managed 8 percent.
Irregular custodial bank accounts holding millions were also flagged, with some managed outside the proper regulatory framework.
The NSSF’s ballooning wage bill, tied to an overstaffed workforce, and long-outstanding pending bills amounting to Sh8.9 million further compound its financial woes.
With contributors now questioning the safety of their pensions, the spotlight is on the Fund’s management and the regulators mandated to oversee it.
The Auditor General has urged relevant oversight bodies to take immediate action, while public pressure mounts for criminal investigations and sweeping reforms at the fund.
