A Survey of the Perception of Members of National Social Security Fund on the Conversion of the Fund from Provident to Pension Scheme

Abstract

This was a study on the Perception of NSSF members on the Conversion of National Social Security Fund (NSSF) from Provident Fund to a Pension Scheme. The advantages of the conversion were compared with the disadvantages so as to establish the way forward. The study was carried out in Nairobi. It covered the existing contributors and the retired members who went to the headquarters to check on their benefit claims and the existing contributors who came to check on their contributions. These were randomly selected using simple random sampling as they stood on their queues for services. The study also covered active, contributing members at their places of work in the Industrial area and city centre. These were also randomly selected. The methods of data collection were mainly structured questionnaires. Key informants were also used to provide relevant information. Focus group discussions were conducted to obtain further information. The research sent out 1,000 questionnaires and 827 of them were returned representing 82.7% response. Descriptive data was gathered and analyzed using percentages and frequencies and presented with the use of tables. Chi-square test was applied to determine the strength of relationship between independent and dependent variables. The results show that most of the respondents were high income earners and contributed up to Ksh. 200 per month to NSSF Provident Fund. It was further realized that about 51% were satisfied with the services provided by the Fund while 35.4% were not satisfied. Those that were not satisfied, cited various problems such as missing contributions in members' statements, delayed responses to claims and queries, as well as poor image of the Fund. The payment of lump sum benefits without any other payment was also cited as a problem. The respondents indicated that with the current system, it was not possible to make prior planning for the same benefits since the actual amount was not known. In a nutshell, the respondents recommended conversion from the current provident fund to a pension scheme through which they are to receive a lump sum payment plus a regular monthly payment after retirement.