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Workers to get savings at 45 as NSSF Bill is passed
A woman pictured holding an NSSF card. Workers who contribute to the NSSF will be assured of mid-term access to their accrued benefits if President Museveni assents to the NSSF Amendment Bill, 2019, which has been passed by Parliament
What you need to know:
Under the principal Act, the NSSF has been under the entire supervision of the Ministry of Gender. But, Finance has since over the past few years taken control on the investment arm without change of the law.
Workers who contribute to the National Social Security Fund (NSSF) will be assured of mid-term access to their accrued benefits if President Museveni assents to the NSSF Amendment Bill, 2019, which has been passed by Parliament.
The Bill, which has been in Parliament since its introduction by government two years ago, was passed yesterday during a plenary sitting chaired by Speaker Rebecca Kadaga.
Parliament amended Section 24 of the existing Act by inserting Section 24a, which allows workers mid-term access to their savings.
According to the amendment, a contributor who has saved for 10 years and is aged 45 or above will be allowed to access 20 per cent of their accrued benefits.
Under the amended law, contributors who fail to get employment for five years after losing their jobs will have to wait until they attain the age of 45 to be allowed to access at least 40 per cent of their savings. Persons with Disabilities (PWDs), who contribute to NSSF and fail to secure a new job one year after losing the previous one, will be allowed to access 75 per cent of their acrued benefits.
Parliament passed the clause of mid-term access to savings while debating the Bill last year but could not conclude on the percentage of access per category.
After a stalemate between Cabinet and MPs, the House then halted debate on clauses 10, 12, 13 to 18 of the Bill and asked the joint committee on Gender and Finance to seek and secure a harmonised position between the ministers of Gender and Finance.
Yesterday, Ms Agnes Kunihira, the vice chairperson of the Committee on Gender, reported that despite the absence of the two ministers, the committee agreed with the amendment.
The State minister for Labour, Mr Mwesigwa Rukutana, failed to convince Parliament to have mid-term access applicable only to the contributor’s savings, not overall accrued benefits. The accrued benefits include interest that NSSF hands to each contributor every financial year when profits are realised from investments.
“Our response to the proposed amendment is that mid-term access should only be maintained on voluntary contributions,” Mr Rukutana said.
However, the House rejected the Cabinet proposal. Cabinet also lost the proposal in clause 13 about NSSF lending directly to government through the Ministry of Finance. This proposal was rejected by MPs from the onset of the debate on the Bill on grounds it would expose NSSF money to abuse.
“In practice, the NSSF lends to government through issuing security and treasury bills. The Ministry of Finance, which is also a supervisor of the Fund, would be getting money from NSSF directly,” Ms Kunihira argued.
Government succeeded on amending Section 12 of the NSSF Act to provide for dual supervision of the Fund by ministries of Gender and Finance. The Ministry of Gender will be in charge of the social security arm of the Fund, which deals with welfare of workers and their savings.
But the Ministry of Finance will supervise the investment arm of the Fund, which deals with the business component where savings are invested in assets to generate income.
After the passing of the Bill, Workers MP Sam Lyomoki, who sometime last year went on strike by sleeping in the House chambers to protest delayed processing of the amendments, apologised to the Speaker for “unparliamentary acts” he exhibited then. “Apologies accepted. I do understand the situation you were in and now the Bill has been passed,” Ms Kadaga responded.
