The Auditor-General’s report has unveiled that retirees have not claimed Ksh166.83 million in owed benefits from the National Social Security Fund (NSSF) as of the end of June 2022. The NSSF has drawn attention due to its failure to transfer these funds to the unclaimed assets authority.
These unclaimed benefits are part of the total accumulated payments of Ksh3.6 billion ($24.9 million) that the state-owned pension fund disburses to retirees upon their retirement, according to a report by The East African.
Several factors contribute to these unclaimed payments, including the passing away of beneficiaries and a lack of awareness among qualifying individuals. A significant portion of unclaimed assets in Kenya can be attributed to individuals who die without a will and to those who do not inform their beneficiaries about their entitlements.
An assessment conducted in 2018 indicated that a substantial amount of Ksh241 billion ($1.7 billion) in unclaimed financial assets had not been reported to the Unclaimed Financial Assets Authority (Ufaa) by both public institutions and private companies.
The Auditor-General’s report highlighted that the unclaimed member benefits amounting to Ksh166.83 million ($1.15 billion) had not been forwarded to Ufaa, contrary to the provisions of the Ufaa Act of 2011. The Act mandates entities holding presumed abandoned assets to report and transfer such assets to Ufaa for safekeeping.
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The law requires a diligent search for rightful asset owners before deeming assets unclaimed and sending them to Ufaa. Non-compliance with this regulation incurs penalties equal to 25 percent of the held assets. Additionally, Ufaa imposes fines ranging from Ksh7,000 ($48.34) to Ksh50,000 ($345) for each day assets remain unreported.
To encourage companies to adhere to reporting, the 2022 Finance Act included a one-year penalty waiver, valid until the end of June 2023. This incentive led to an increase in surrendered unclaimed assets, totaling Ksh57.5 billion ($397 million) by December 2022, up from Ksh48.4 billion ($334.3 million) in June the previous year.
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The surrendered assets encompassed Ksh27.3 billion ($188.5 million) in cash, 1.2 billion units of shares valued at Ksh30.17 billion ($208.4 million), 9.1 million units of trust funds, and 3,661 safe deposit boxes.
