First presented before Parliament in August 2019, the National Social Security Fund (NSSF) Amendment Bill, 2019 has generated controversy on issues regarding the mid-term access of funds, direct lending to government and whether the fund should revert to the ministry of Gender.
The process hit a snag when the finance committee allegedly cancelled the last meeting with Gender Minister Janat Mukwaya, a move which Gender committee chairperson Alex Ndeezi says proves lack of cooperation.
The Speaker, Rebecca Kadaga says she will meet the chairpersons of the Gender and Finance Committees who have disagreed during the processing of the National Social Security Fund Amendment Bill, 2019.
The committee comprising legislators from the Finance and Gender committees, is currently reviewing the Bill, which, among others, seeks to amend the NSSF Act, to change the taxation regime for social security contributions investment returns and benefits, introduce voluntary contributions over and above the standard contribution of five per cent and allows midterm access to voluntary contributions.
Platform for Labour Action wants all members to get mid term access to their benefits and not just voluntary contributors as proposed in the National Social Security Fund Amendment Bill, 2019.
According to Kasekende, “piecemeal reforms have a potential to introduce contradictions that may undermine confidence in building a savings culture for retirement”.
However, Ajedra says splitting the oversight of a large institution like NSSF is a recipe for disaster because it puts the fund at risk, saying this will create “a stalemate in decisions” and “supervisory loopholes.”
Uganda Retirement Benefits Authority-URBRA has rejected the provision that caps the levy National Social Security Fund-NSSF should pay to the regulator at 0.05 percent.
The ULS Treasurer, Aaron Besigye, said the proposal for government to borrow directly from NSSF is "inappropriate" because among other reasons, direct lending to government is outside the NSSF mandate and is a preserve of Bank of Uganda.
The foundation wants the bill amended to provide for the mandatory contribution of employees and employers in the informal sector to the National Social Security Fund-NSSF.
On Tuesday afternoon, trade union leaders led by the NOTU Chairman General, Wilson Usher Owere appeared before the Joint Committee of Finance and Gender to present their view on the NSSF Bill.
Mukwaya says the tax exemption provision caters for employer’s contributions and employee’s contributions below 30 percent of their income and investment income of NSSF. She also notes members benefits shall be taxed only during payment at 55 years while those who get paid at 60 years and above will not pay taxes on any benefit.
A cross section of employees and employers have expressed mixed reactions to proposals by government in the National Social Security Fund Amendment Bill, 2019.
The Bill proposes 29 amendments with the aim of expanding social security coverage through mandatory contributions of all workers regardless of the size of the enterprise or number of workers. It is also seeks to establish a stakeholder board, provide for midterm access to voluntary contributions and enhance fines.
