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.
Government Justifies amendments to NSSF Act
The Gender, Labour and Social Development
Ministry, has tabled the National Social Security Fund Amendment Bill, 2019 for
its first reading.
The state for Youth and Children Affairs
Minister, Florence Nakiwala Kiyingi tabled the Bill before parliament chaired
by the speaker, Rebecca Kadaga on Tuesday afternoon.
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.
Government argues that the NSSF Act 1985 provides
that only workers in a company that employs five or more employees are eligible
to contribute for their retirement. This government says contradicts the National
Objectives of Directive Principles of State Policy in the 1995 Constitution and
the International Labour Organisation Convention 102 on social security among
other laws and treaties that Uganda subscribes to.
The Bill proposes to make contributions compulsory for all
workers in the formal sector and also allow voluntary contributions for workers
in formal and informal sectors. Government also wants to create a
stakeholder’s board that comprises government, employers and employee
representatives. It also seeks to clearly define the roles of the ministers for
social security, finance and public service in the management of NSSF.
Currently, the Act "doesn’t make express
provision for the representation of workers, employers and other stakeholders
on the NSSF board of directors". The NSSF Act states that the governing
body of NSSF shall be the board, consisting of a chairperson, the managing
director and not more than eight other members appointed by the minister for
It adds that the minister shall appoint the chairperson and
other board members, other than the managing director for a period of three
years and shall be eligible for reappointment. Now, government proposes that the board will among others be empowered
to supervise management, introduce new benefits, and advise on investment of
scheme funds including lending to government among other functions.
Government also cites other defects in the NSSF Act including
that the fine of Shillings 10,000 in the Act can no longer
serve the purpose for which they were imposed and thereby proposes a fine of Shillings
10 million or one year jail term or both for persons convicted for breaching
provisions of the NSSF act.
The Bill comes months after Workers MP; Dr. Sam
Lyomoki was granted leave of parliament to present a private member's Bill to
amend the NSSF Act, 1985. In February, Lyomoki claimed that the
decade-long delay by government to amend the Act prompted him to move the
motion seeking leave of parliament to bring a private member's Bill.
Lyomoki presented a draft bill, which proposed 30 amendments
to the NSSF Act, such as establishing and enhancing social protection and
management framework to achieve efficient and transparent administration of the
Fund, streamlining the appointment and tenure of the Board and the right of
members to recall Board members.
He proposed to streamline the benefits regime under the Act
to provide for others such as maternity, unemployment and other specific
benefits and providing for proper management standards for the efficient
custody and investment of funds.
Lyomoki proposed that the board of directors should be
made up of five representatives of workers, three representatives of employers
and two government representatives. He also proposed to empower the
board of directors to appoint the managing director, deputy managing director,
secretary, staff and any public officers. These powers are all vested in the
minister in the current Act.
By the time of filing this story, Lyomoki was yet to respond
to government's proposed amendments and why he hasn’t tabled a substantive Bill
to amend the NSSF Act, five months after getting leave of the House.