The National Social Security Fund (NSSF) imposed penalties amounting to Sh2.3 billion on employers who delayed in submitting pension deductions for workers by the close of December 2024, even as the total unpaid contributions reached Sh26.9 billion.

The Auditor-General Nancy Gathungu, in her latest report, said the penalties were collected from employers who had failed to remit statutory deductions on time.

The recovery followed renewed efforts by NSSF to go after defaulting employers amid mounting pressure from Parliament.

“The amount recovered in penalties as at December 31, 2024, was Sh2,345,495,492,” Gathungu said in the report, quoting data from NSSF.

The report further notes that some employers who owed the fund Sh909 million have since shut down operations, including defunct local authorities, which alone accounted for Sh895.5 million of the debt. NSSF has issued demand notices for Sh1.83 billion to employers who are yet to clear their outstanding remittances.

As of June 2023, total unremitted contributions stood at Sh26.9 billion, with a large portion owed by various government agencies, counties, and former municipal councils.

On principal amounts, the report shows that by December 2024, NSSF had managed to recover Sh155.1 million, while an additional Sh7.9 million was under payment arrangements. A further Sh8.8 million was tied to employers under receivership or liquidation.

Despite these figures, the Auditor-General raised concern that NSSF was not doing enough to recover the unpaid contributions.

The report warned that the longer the debts remained uncollected, the more likely they would become irrecoverable, especially those linked to dissolved institutions.

“The recovery rate is quite low and recovery of some will be remote as they relate to defunct local authorities,” Gathungu stated.

In addition to recovery challenges, the report tracked benefits owed to 19,623 members who exited the fund, the majority of whom have never received their payments. According to NSSF, 952 of the beneficiaries have been found over the last two years, and Sh20.3 million was paid to them.

However, Sh158.48 million remained unpaid as of June 2024.

“Details of the remaining 18,671 have been mapped and distributed to regions and branches for tracing of members,” NSSF said in response to the audit.

Meanwhile, in a separate report adopted in June 2024, the National Assembly’s Public Investments Committee recommended that NSSF’s Managing Trustee take urgent steps to ensure the recovery of all unremitted contributions “through aggressive follow-ups”.