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.
Parliament has halted its decision on the proposed
mid-term access to benefits by contributors to the National Social Security Fund
(NSSF) after legislators failed to agree on the group of people and percentage that
should be availed.
This followed a debate on a joint committee report comprising members from the
Finance and Gender committees in parliament who recommended that members
aged above 45 and have saved for at least 10 years, be allowed to access their benefits.
This main report
noted that the purpose of mid-term access was to provide for additional
benefits and relief to members of the Fund before they reach the age prescribed
by the law. Savings can only be accessed when a saver clocks 55, according to
the current law.
The MPs also
recommended that a person with a disability who lacks gainful employment or
fails to generate income, and is unable to make contributions to the Fund for a
period of not less than one year should access up to 75 per cent of their
contributions upon application.
However in his
minority report, Bulamogi County MP Kenneth Lubogo said that members who
lose their employment and remain unemployed for a period of not less than three
years, should also upon application be entitled to 40 per cent of the balance on their account.
These conflicting recommendations were further
complicated by a motion by Busongora
North MP William Nzoghu who wanted government to allow all contributors access 20
percent of their savings with the Fund in light of the economic distress caused
by the Covid-19 pandemic.
not die of hunger leaving their savings to the survivors. NSSF has 1.5 million
members who contribute over 1.8 trillion in savings annually and the Fund has
over 11.2 trillion in assets. Availing members with their savings will help
lessen the negative impact of Covid-19 to over 1.5 million households,” he
Nzoghu said that it
was prudent for government to consider an amendment to the NSSF Act granting
contributors 20 percent payments and lessen hardships on the households.
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Speaker Kadaga then
guided that Nzoghu’s motion together with reports on the Bill would be debated
and handled at the same time.
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During the debate, Soroti
Woman MP Angelline Osegge supported Nzoghu’s proposal saying that the first
responsibility of the Fund is to the savers and not government. She said that
the law should be amended to enable people access 20 percent of their money.
Rukungiri Woman MP Betty Bamukwatsa also weighed in saying
that this was the time Ugandans need their contributions to help them during
the difficult time occasioned by the Covid-19 pandemic.
On the other hand, Soroti County MP Kenneth Esiangu
suggested that the money be structured in age brackets and access be based on how long a
person has been saved.
“We should let the people access between 20 and 30
percent, these payments won’t drain the Fund. Every member should get something
to alleviate the current suffering,” he said.
But Worker’s MP Aston Rwakajara supported the main
committee report saying that anyone who has saved for more than 10 years and is
above 45 years should get at least 20 percent of their money. He appealed to
his colleagues not to only focus on Covid-19 pandemic alone but allow mid-term
access to address many other issues which may come in the future.
After failing to agree on a common position for
mid-term access, Speaker Kadaga stood over the decision allowing MPs to debate
other clauses in the Bill.
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
But legislators also failed to agree with the Joint-Committee recommendation that the Fund should be
supervised by both the Ministry of Finance and the Ministry of Gender, Labour
and Social Development as advised by President Yoweri Museveni.
Despite pleas by
the Minister of Gender Frank Tumwebaze and Minister of State for Planning David
Bahati for the government position to be adopted, a section of MPs led by Dokolo
Woman MP Cecilia Ogwal put up a protest saying that double accounting for funds
could not be tolerated, and also questioning why the Gender Ministry is not solely
allowed to manage and supervise the Fund.
The Fund is currently
managed by the Ministry of Finance despite its relation to the Labour Ministry.
Kadaga also ruled that the decision on this matter is stood over so that the concerns are considered next week.
Meanwhile, Parliament agreed and rejected the proposed direct lending by
the National Social Security Fund (NSSF) to the government. This followed the
committee members' recommendation that this was intended to avoid abuse of
member's funds and conflict of interest.
MPs observed that
NSSF already lends to the government and other entities using instruments
prescribed in the Uganda Retirement Benefits Regulatory Authority (URBRA) Act
& Regulations including, among others; Treasury Bills, Bonds and government
securities. The members added that direct lending would instead contravene
section 68 of the URBRA Act, 2011 which prohibits direct lending
which is not through securities sold on the open market.