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Unsolved midterm access for savers awaits new NSSF board
Finance minister Matia Kasaija (left) and NSSF managing director Richard Byarugaba during the NSSF annual meeting on September 28, 2019. PHOTO/FILE
What you need to know:
- Some of the questions the Fund is facing require the actions of both the Legislature and Executive, but are key to public satisfaction.
A new board that will play an oversight role over the multi-billion dollar National Social Security Fund (NSSF) has been appointed to steer the fund facing questions, especially, on benefits access for members.
Mr Peter Kimbowa, a corporate governance and management expert, will chair the 10-member team tasked with steering “the Fund through a transition as it positions itself to play a major role in the expansion of social security coverage and expanding the long-term savings space in Uganda”. He replaces Patrick Byabakama Kaberenge, who served the maximum two terms.
The key question for the fund is the controversial mid-term access for members. While there is overwhelming public support to allow members who are 45 years and above and have contributed to the fund for 10 years to access up to 20 per cent of the benefits, regulators and management have been less enthusiastic.
Although President Museveni has expressed willingness to sign onto the mid-term access, he has been less assertive on the decision stalling on procedural issues. Last month, NSSF management asked Parliament to split the current Fund into two to provide for workers who would want to have midterm access to their savings.
Under the proposed mid-term access, more than 100,000 people would be eligible for some cash which the fund managers argue would have a serious dent on the NSSF’s balance sheet if not handled well. NSSF manages assets worth more than Shs15.6 trillion invested in fixed income, equities and real estate within East Africa and plans to increase its asset worth to Shs20 trillion by 2025. This is an achievable goal given that the fund had assets worth more than Shs10 trillion at the preceding board appointment in 2018.
The fund came under spotlight, recently, for failure to support members by paying out a portion of their savings. Activists led by former presidential candidate Dr Kizza Besigye had pushed for the move as one of the measures to support the population battered by the ravaging Covid-19 pandemic and the attendant guidelines to stop its spread. NSSF management cited a lack of legal framework to back such a move.
Some of the questions the fund is facing require the actions of both the legislature and executive, but are key to public satisfaction and perception of the fund’s operations. One such is the issue of the liberalisation of the pension sector, which would see NSSF lose its monopoly.
New board members
The team appointed by Finance minister Matia Kasaija, whose tenure commenced yesterday, will serve for the next three years until August 31, 2024. Of the 10 members, only Peninnah Tukamwesiga is female. The old board had two female members, Florence Namatta Mawejje, and Ms Tukamwesiga. More than 50 per cent of Uganda’s population is female, but women have historically been under represented on boards.
Besides Ms Tukamwesiga, a lawyer representing workers under the Confederation of Free Trade Unions (COFTU), other members include Mr Aggrey David Kibenge, representing the Ministry of Gender, Labour & Social Development, and Mr Patrick Ocailap, representing the Ministry of Finance, Planning & Economic Development.
Mr Silver Mugisha, the managing director at National Water and Sewerage Corporation and Mr Fred K. Bamwesigye of Uganda Civil Aviation Authority, will represent employers through the Federation of Uganda Employers.
Former legislator Sam Lyomoki will also represent workers under COFTU while Mr Bahemuka Julius and Hassan Lwabayi Mudiba will represent workers under the National Organisation of Trade Unions.
Profile
Mr Peter Kimbowa, is the Team Leader at the CEO Summit Uganda– a private sector Think Tank and is the managing partner at IFE Consultants Ltd.
His current and former roles include board membership at ESKOM, Equity Bank Uganda, Baylor College of Medicine, and Kampala Archdiocese Land Board.
He has also held advisory roles at the Finance ministry and boards in the public, private and Civil Society Organisations.
