Inside new NSSF law, benefits

Parliament took a vote on clause 24A which grants members, who have clocked 45 years and saved consistently for 10 years, access to 20 percent of their accrued benefits.

There was limited debate on the issue as opposed to the unwinding debate that characterised the earlier Bill 2019  passed by the 10th Parliament which granted access for those who clocked 45 years or saved for 10 years.

“Today I will breathe. I have been receiving phone calls and messages from the workers of this country. Parliament has delivered on what should do for qualifying workers to have midterm access to their accrued NSSF benefits. Congratulations,” Speaker Jacob Oulanyah tweeted

Since 2019 when the first Amendment and the clause were introduced, workers have waited anxiously for a resolution.

The demand for partial access to the NSSF savings increased in 2020 after the outbreak of Covid-19 in the country and the adverse effects it had on the economy but resistance from Fund managers, President Museveni’s decline to assent to 2019 Bill and the throwing out of the returned Bill by Speaker Oulanyah bred even more anxiety.

The proposed legislation also grants persons with disabilities (PWDs) access to 50 percent of their accrued benefits once they clock 40 years and have contributed consistently to the Fund for 10 years, a provision President Museveni disagreed with when he returned the earlier amendment to Parliament.

The Act, whose key objective includes increasing and opening up the Fund to more savers, now mandates all employers regardless of the number of employees to make remittances to the Fund as opposed to the principal act that limited membership to firms with five employees.

In addition to voluntary accounts, members will also be allowed to save over and above the mandatory 15 percent.

A person who is self-employed and any Ugandan may apply for membership to the Fund and shall make voluntary contributions to the Fund.

Members of Parliament (MPs), however, voted that whereas voluntary members can join unconditionally, they cannot access their money at anytime and this access to voluntary contributions will be determined by the minister of Finance and the NSSF Board.

Gender and Labour minister Betty Amongi said the conditions by her Finance counterpart are aimed at protecting the Fund, since voluntary savers could have huge sums, and free access could damage the Fund.

The Leader of Opposition, Mr Mathias Mpuuga, however, expressed dissatisfaction on the effectiveness of the proposed legislation in dealing with emergencies as earlier envisioned.

Mr Mpuuga said there is need for a window where members can access the 20 percent benefits without the age and time condition, in case of emergencies.

“Amendments were occasioned by a national crisis. We have not taken care of emergencies like a recession and, therefore, there is need for intervention. We need a window, even for a mandatory saver, to access the money when they need it,” he said.

Mr Mpuuga added that there is need to establish how long it would take for a pay out once a member met all the conditions. Yesterday, MPs mandated the Minister of Finance to ensure commencement of the midterm access happens after 60 days of the publication of the Act.

The proposed legislation also provides for punitive fines against employers who deduct but fail to make remittances.  Guilty employers will pay 20 percent of the amount deducted as fine, in addition to remitting the total money deducted and interest that would have been accrued.

Parliament had earlier voted that the ministries of Gender and Finance will co-manage the Fund, with the former taking on the overall supervisory role while Finance will be in charge of investments, borrowing, audits, member’s accounts and everything financial.

The position for dual supervision had earlier been agreed upon by the President and workers representatives after the two sides failed to agree on a single ministry.

President Museveni preferred to have Finance ministry oversee the Fund.

Kiira Municipality MP Ssemujju Nganda, however, questioned the balance of powers for the two ministries suggesting that the Labour ministry would be just a titular head, while all the major functions will be with the Finance minister.

“We are vesting supervisory powers in the Ministry of Gender, yet all the functions are left to Finance. If Gender needs expertise, do you have to put it under Finance? If everything is Finance for you what are you going to supervise?” he asked.

A look at the Law

Amendments

1. No taxation on benefits

2. No voting rights for the managing director

3. Sets a time limit of 60 days for the Minister of Finance, the political supervisor of the Worker’s Fund, to issue a Statutory Instrument for commencement of the Clause on midterm access once the enabling law is gazetted.

4. Members aged 45 and above and have saved for at least a decade, midterm access to 20 percent of their savings.

5. Persons with disabilities to get  access of  50 percent of their accrued benefits once they clock 40 years and have contributed to the Fund for the preceding 10 straight years.

6. A person who is self-employed may apply for membership to the Fund and shall make voluntary contributions to the Fund.

7. Any other person may apply for membership and make voluntary contributing to the Fund.

8. Every employer, irrespective of the number of employees, shall register with the Fund as a contributing employer and shall make regular contributions for his or her employees.

What some stakeholders say...

NSSF tweeted

....We support the Bill because it provides new opportunities for the individual savers, the Fund and the country. We are prepared to implement the Bill in its entirety and we ask all members to wait patiently as it goes through the final process of becoming law.

Wilson Owere, NOTU

This time I am sure the President will assent because we had a meeting with him to harmonise the gray areas and there are no contentious issues…This Bill has many benefits. It is opening up opportunities for all workers and those in the informal sector.

Flavia Kabahenda, Parliament Gender Committee

I am glad that the Bill, which has been here since 2012, has finally been passed and we are very optimistic that this time, it will not come back with any other issues because the consultation that has been done since 2012 has been enormous.

Abbas Mpindi, PWDs rep

This is good because it has been a challenge that PWDs have been having difficulty in getting another job in case they lose one. Receiving 50 percent of their savings is something that can help them set an enterprise in the informal sector for themselves.

Geoffrey K. Solo, Bukomansimbi South

If the President does not sign, it will mean that the speculations were true that government used the money and he (President Museveni) is fearing to accept the Bill because he has used the money.