More than half of employers on NSSF register are not active
Mr Ayota says that many employers register with the NSSF to secure contracts, but never remit employee savings. Photo / File
What you need to know:
- Of the 98,000 employers registered with NSSF, more than 72,000 are not active
Only 26.2 percent of employers registered with the National Social Security Fund are active, according to the NSSF managing director Patrick Ayota.
The details above mean that the majority of companies and organisations on the Fund’s register, which stands at least 73.8 percent are not remitting employee savings.
In a presentation during the annual members meeting in Kampala yesterday, Mr Ayota said there were various reasons for the high number of inactive employers, noting that some only register with the Fund to obtain certificates for securing contracts. However, he did not provide more details.
“We have about 98,000 employers registered with us, but guess what, only about 26,000 are active with us. There are several reasons why. Somebody just comes to register with us because they need to get that certificate from us so that they can secure a contract. After the contract, they disappear,” he said.
The revelation means that at least 72,000 employers, which is slightly more than three-thirds of the employers on the register are not remitting employee savings.
However, it was not immediately clear how many employees were affected by the large number of non-compliant companies.
Mr Ayota did not give other reasons for the non-compliance but indicated the Fund had created several avenues, including a whistleblower portal to increase compliance.
During the period to June, NSSF registered an increase in the number of savers to 2.3 million, of which, 1.7 million had balances on their accounts.
The Fund, which now the law allows to recruit voluntary savers registered 443,000 voluntary members.
Mr Ayota also noted that to improve compliance, the Fund had partnered with several ministries, departments, and agencies, which continue to ensure that all companies that they subcontract are registered with the Fund and remitting members’ savings.
For instance, he indicated that more than 2,200 employers had registered with the fund supported by collaborations with the Petroleum Authority of Uganda, while 387 and 187 employers had registered with the support of Uganda National Roads Authority and Uganda Communications Commission, respectively. Another 116 employers operating in the industrial parks of Kapeeka, Namanve, and Tangashin Mbale were registered in the period, while more are being registered.
NSSF currently covers only 14 percent of Uganda’s private sector eligible employees, which means that the majority of working Ugandans are not saving for retirement.
However, under Vision 2035, the Fund is seeking to push coverage to at least 50 percent, which is projected to increase assets under management to Shs50 trillion from Shs22 trillion as of June 2024.
