By: Kebba AF Touray
The National Audit Office has in its report on the Social Security and Housing Finance Corporation, reveals that the cooperation has spent a total sum of D612 million between 2018 to 2021 under the Federated Pension Fund (FPF) and National Provident Fund (NPF).
The auditors made this revelation yesterday, Monday 27th February 2023, at the National Assembly while presenting their Performance Audit Report to members of the Public Enterprise Committee (PEC) for scrutiny and consideration.
Omar P Sabally, the Audit Manager at the Performance Unit, National Audit Office, told PEC members that “Between 2018 and 2021 the Corporation spent GMD191 million and GMD421 million in respect of member claims for FPS and NPF respectively.” He further reported that the cooperation in 2018 spent a total of D191 million and D421 in 2021, which gives the said total of D612 million on the said funds. He added that a total of DGMD177 million and GMD210 million were spent on staff and administrative expenses for FPS and NPF respectively.
On the timeliness of benefit payments, he said “for the Federated Pension Scheme, SSHFC took about 4.5 months (4 months and 15 days) to process claims in 2018. This has been reduced to 2.5 months (2 months and 15 days) in 2021. However, this processing time is still 369% more than the standard processing time.” He said for the Federated Pension Scheme, for the period 2018-21, only 30 claims (17%) were processed within the 16-day standard processing time. 51 claimants (29%) waited more than four months before they received their gratuity benefits. He added that for the National Provident Fund, 27 claimants (42%) who were affected by the contribution gaps had written to SSHFC to sacrifice contributions gaps because of the frustration of delays caused by recovering such contributions from former employers. He therefore said that the audit report recommended that the SSHFC should review all its member accounts to maintain accurate information about their accounts and Initiate a program to communicate and recover all contribution gaps in respect of its existing members, and that the SSHFC should ensure that remittance schedules are adequately reviewed so that contribution gaps are timely communicated to employers for prompt payments.
Based on the foregoing, he said the SSHFC has not timely provided the benefits that were claimed by its contributing members, adding that claimants waited much longer than the standard processing duration established by the Corporation, though some of these delays were not the direct effect of internal processes, as most of them were within the control of the Corporation.
“The Corporation should not wait until a claim is filed to communicate and pursue a gap in member contributions. The Corporation should also provide timely account information to employers and employees,” he added among other recommendations.
On increment of pension for pensioners, he went on to report that they have found that SSHFC has not increase pensions as in line with the estimated rise in earnings made by the Actuary, and that the pension increase rates ranges from 2.7% to 33% for the 2018 increase and 5% to 65% for the 2022 increase depending on the level of monthly pensions.
According to him, SSHFC increase rates more than the estimated rise in earnings made by the Actuary resulted in increased pension costs for every GMD1 increase by 50%, instead of 6%, has resulted in an incremental annual pension cost of GMD5.28.25. He said the audit stated that SSHFC has not appropriately and regularly applied pension increases in the period under review as specified by the SSHFC Act, adding that these increases were also not timely provided to the pensioners for an increase effective January, 2019.
“SSHFC should not increase pensions beyond the estimated rise in earnings made in the latest available Actuarial Valuation Report. When a new minimum pension is established, existing pensioners earning below the minimum pension can be moved to the new minimum pension,” he recommended. He however, recommended that pensioners who receive above the new minimum pensions should not earn more than the estimated rise in earnings that the Actuary made.
