Risk management is the process of identifying, analysing, accepting, mitigating or transferring uncertainty in investment decisions. Fund managers apply risk management by analysing and attempting to quantify the potential loss of an investment and then acting accordingly.

In Kenya, there are several options for post-retirement medical coverage, including private insurance plans and schemes offered by the government. The National Hospital Insurance Fund (NHIF) is one such government-run scheme that provides coverage for medical expenses for individuals who are retired and receiving a pension. Additionally, there are private health insurance companies that offer plans for retirees.

Institutions are being transformed thanks to the integration of new technologies. This vision represents a corporate change with a social impact, reducing costs, simplifying processes and procedures, and raising awareness of the importance and benefits of this transformation.

A brainchild developed after years of engagement with informal sector participants, Rukisha which in English translates to “Leap”, is a proprietary solution that is poised to revolutionize the social security sector driving penetration and more significantly enhancing compliance in the payment of contributions.

Article 12 of Law No. 5508 on the Promotion, Protection of Maternity and Support for Breastfeeding establishes that maternity allowance should be paid to employed women by the social security scheme of Paraguay’s Social Insurance Institute (Instituto de Previsión Social – IPS). This amount is equivalent to 100 per cent of her salary at the time of delivery, and is paid for the prescribed months of rest. This used to be given to women in a single payment.

The issue of population growth and social security planning is one of the biggest challenges facing governments today, and is a key part of a good social security system that instils confidence in its members.

The Retirement and Pension Fund for Employees of Banks and Related Institutions (Caja de Jubilaciones y Pensiones de Empleados de Bancos y Afines) (Bank Fund, hereinafter) is in constant communication with its members. It therefore continuously updates its databases, in order to have a better understanding of members’ current realities, experiences and needs.

Digital transformation is happening in institutions through the integration of new technologies. This vision represents an institutional and social change, optimizing available resources, reducing costs, shortening processes and procedures, and raising awareness of the importance and benefits of this transformation.

The Kenyan Pension Governance Structure has been modelled to factor independence of service providers, regulators and trustees. The Trustees sit at the apex of this structure and report on the performance of the schemes to the Regulator (The Retirement Benefits Authority).

The National Health Insurance Fund (NHIF) is mandated to ensure that the entire Kenyan population is shielded against catastrophic health expenditures which has a potential risk of pushing affected individuals to impoverishment. In execution of this mandate, NHIF undertakes five critical tasks which include beneficiary identification, member registration, revenue collection, empanelment and contracting of hospitals, and claims and benefits management. NHIF is connected to close to 8,000 health care providers.

Good practice in health – service quality.

As health-care systems have evolved to become more complex and due to the resultant increase in patients coming to harm in health care settings, patient safety has emerged as a health-care discipline.

The Actuarial Advisory Office (Asesoría Actuarial) of the Social Insurance Institute (Instituto de Previsión Social – IPS) carried out an actuarial valuation of the Common Retirement and Pension Fund (Fondo Común de Jubilaciones y Pensiones). The valuation looks to comply with international best practices and observe the guidelines and standards of the International Standards of Actuarial Practice 2 (ISAP 2), and the ISSA-ILO Guidelines on Actuarial Work for Social Security, with technical support from the International Labour Organization (ILO).

Like most of the world’s countries, Paraguay has adopted lockdown measures to prevent the spread of COVID-19. These steps taken by the government have impacted the productive sector, leading to mass suspensions of employment contracts for persons insured with the Social Insurance Institute (Instituto de Previsión Social – IPS) of Paraguay.

Paraguay’s Social Insurance Institute (Instituto de Previsión de Social – IPS) used to make sick leave payments at its administrative offices, which had associated administrative costs and meant beneficiaries had to visit the IPS service counter in person.

Service quality measured by effectiveness and efficiency of systems by social security institutions is paramount in driving trust and confidence in socials security systems. Currently, mobile banking penetration in Kenya is approximately 90 per cent of the population and pension schemes make payments to individual pensioner through traditional channels such as banks and credit unions. These channels have a cost implication to the scheme and to the pensioner.

The ISSA Guidelines on Investment of Social Security Funds is anchored on a robust investment philosophy that is centred on high investment returns to the scheme and consequently to the members. In addition to this, social security institutions have a social responsibility to its membership and the environment to promote environmentally conscious investment.

The informal sector workers, including youth, are not covered by any regulated savings or social insurance schemes to help cushion the workers from shocks, loss of jobs, etc. In line with the National Social Security Fund (NSSF) of Kenya Act No. 45 of 2013 and Government agenda of providing universal social security coverage, NSSF developed a product “haba haba” which has short term maturity period.

Despite social security being enshrined as a human right by Kenya’s constitution, and the National Social Security Fund (NSSF) being the public institution mandated to provide social security coverage to workers, about 80 per cent of Kenya’s workforce is still not covered. Using an integrated strategic shared partnership approach, NSSF together with other public and private institutions seek to extend social security coverage to the workers in the informal economy through the “Haba Haba” digital mechanism.

In 2019, the Local Authorities Pension Trust (LAPT) carried out a digital marketing campaign dubbed “Eneza Pensheni” which is Swahili for “Spread Pension”. The campaign was premised on the fact that less than 20 per cent of Kenyans were covered by a workplace pension plan. Notably, a survey by Infotrack Research & Consulting, commissioned by the LAPT indicated that the number of Kenyans with a pension plan had declined to 10 per cent as most respondents intended to rely heavily on investments such as property to cater for their financial needs after retirement.

The Local Authorities Pension Trust (LAPT) actively seeks to create sustainable value through our business activities – for our customers, employees, shareholders and society. We have embraced sustainability as a value that motivates and inspires our business undertakings. It is owing to this reason that LAPT signed up to the United Nations (UN) Global Compact initiative, a call to companies to align strategies and operations with universal principles on human rights, labour, environment and anti-corruption, and take actions that advance societal goals.

Financial sustainability of a social security scheme is heavily reliant on contribution collection and compliance. Inspired by the ISSA Guidelines, the Local Authorities Pension Trust (LAPT) has identified administrative solutions to improve access to contributory social security programmes for populations that are difficult to reach.

One of the major requisite for the pensioners post their retirement from the Local Authorities Pension Trust (LAPTRUST) of Kenya has been to provide life certificates. In the past, one had to present themself physically before the schemes’ agent or have the life certificate issued by a competent authority.

Most health insurance institutions grapple with the challenge of fraudulent claims. Globally, it is estimated that 20 to 30 per cent of the finances are lost through fraudulent claims. The National Health Insurance Fund (NHIF) of Kenya has been no exception in dealing with this menace. Faced with this challenge, NHIF introduced biometric member registration and identification system as a measure to control fraud cases emanating from few individual beneficiaries and health care providers who choose to engage in defrauding the organization.

The rationale of a retirement benefits scheme is to alleviate old age poverty and a contributing factor to poverty is the loss of the principle bread winner. Despite paying survivors benefits, statistics indicate that up to 80 per cent of the said families have to downgrade their living standards and are susceptible to poverty. To address this challenge, the Laptrust scheme introduced additional insurance-based benefits; Group life cover (3 times annual pensionable salary) and last expense (USD 1,000) to complement existing survivor's benefits drawn from the scheme.

The National Health Insurance Fund (NHIF) in Kenya, hereafter also referred to as the Fund, which is a state corporation mandated to offer health insurance to the populace, deployed the Customer Relationship Management System (CRM) as a strategic move to timely address customers’ complaints and to boost customer satisfaction levels. The key benefits of the deployment of this system include a quick view of customer pain points, which lead to timely interventions that in turn enhances customer bonding.

The ISSA Guidelines on Service Quality aims to assist social security institutions create value for members and beneficiaries thus enhancing performance. The Trust Fund of the Local Pensions Authority Trust (LAPT) addresses the above by providing a platform where principal members and their beneficiaries can proactively manage their wealth and financial goals.

One of the major requisites for the pensioners post their retirement from the scheme has been to provide life certificates. In order to get this life certificate, the individual drawing the pension is required to either personally present oneself before the scheme’s agent or have the life certificate issued by an approved authority.

The National Health Insurance Fund (NHIF) is a state corporation mandated to offer health insurance to the Kenyan population by developing selfcare platforms to facilitate easier access of services to members.

The platforms come in three categories namely: NHIF mobile app, USSD code and NHIF website selfcare platform available on www.nhif.or.ke. Through these platforms, NHIF beneficiaries are enabled to carry out self-registration, check their payment status, choose, or change their outpatient facilities and check their benefit entitlements.

Prior to 2015, the National Hospital Insurance Fund (NHIF) was only offering Inpatient services to the members on a rebate system. This arrangement was still deficient in breadth for some crucial medical services required by its members, specifically, surgical care and specialized laboratory investigations. This meant that members were still incurring out-of-pocket expenditure to access advanced treatment.

Financial institutions in Africa have successfully plugged into the mobile ecosystem and deployed services that have revolutionized service delivery, transforming customer engagement touch points and feedback mechanisms as well as enhancing responsiveness of the financial institutions. In addition to this mobile tech has enabled financial penetration. Currently Kenya has 68 per cent financial penetration through mobile tech and is at 80 per cent in use. While many Social Security services providers use mobile technology, they are still to fully leverage on its capabilities.

It has been recognized that a major challenge in developing countries is how to ensure that the poor are included in health financing arrangements and they can access benefit from health insurance coverage as the non-poor.

The Social Security (Minimum Standards) Convention No.102 adopted by the International Labour Conference of the ILO on 28 June 1952 establishes worldwide-agreed minimum standards for all nine branches of social security to encourage the widest development of social security schemes. These branches are; medical care, sickness benefit, unemployment benefit, old-age benefit, employment injury benefit, family benefit, maternity benefit, invalidity benefit; and survivors benefits.

Records Management is a critical part of social security administration. The inherent risks in poor records management are not only limited to incorrect payments but often expose the scheme to fraud, loss of data/information, compromised data integrity, poor fund management leading to non-realization of return on investment, litigation, etc.

The National Hospital Insurance Fund (NHIF) has been focusing its efforts to recruit members from the informal sector in a bid to achieve Universal Health Coverage. Further, NHIF has also engaged strategic partners to cover the indigents. This meant that there was need for innovations to meet the needs of this target group. One area of concern was how NHIF would collect insurance premiums from members in the informal sector.

The RBA and the National Federation of Jua Kali Associations therefore collaborated to establish a suitable retirement benefits scheme that would cater for people in the informal sector. The "Mbao" Pension Plan was set up and was officially launched on 28 June 2011, for the Medium and Small Micro Enterprises (MSMEs) Sector and to help members of different Jua Kali Associations to save regularly to provide a long-term and reliable income when they retire from their jobs or business.

Summary

Another challenge facing NAV was the growing number of claims to be processed due to a rise in the number of people eligible for pension.

A new technical platform based Service Oriented Architecture (SOA) was established and the following principles allowed the project to reach its goals:

Poor performance by National Social Security Fund (NSSF) has been a matter of public concern since 1965. A historical analysis of NSSF service delivery in Kenya revealed a steady decline despite a raft of measures taken to alleviate the situation. The decline was evident in member contributions, registrations, benefit processing, compliance, cost management, suspense containment and resources utilization.