Leaders of the workers unions have questioned the intention of the management of the National Social Security Funds (NSSF) after it said there is no money to enable mid-term access of savings by members if the NSSF Amendment Bill, 2019 is passed into law.
Parliament, which is yet to pass the Bill, has so far approved mid-term access of savings by the contributors but it is yet to determine the percentage and when such withdraw can be made.
Mr Richard Byarugaba, the NSSF managing director, told Daily Monitor in an interview last week that if the Bill is passed, the Fund may have to sell its assets to raise Shs2.9 trillion required to pay 320,000 members, who currently qualify for 20 per cent payment of their pension contributions.
“More than 180,000 members are aged 46 and above, and a further 140,000 have contributed for more than 10 years. That means more than 320,000 members would qualify for mid-term access,” Mr Byarugaba said.
Mr Wilson Usher Owere, the chairperson of the National Organisation of Trade Unions, told Daily Monitor yesterday that the comments from Mr Byarugaba were contradictory because the chairperson of Board of NSSF, Mr Patrick Byabakama Kaberenge, while addressing the annual general assembly on September 28, assured the contributors that the Fund has enough money to enable mid-term access to qualifying savers.
“The MD is issuing his personal position against the workers’ interests, something that was agreed in the consultations from the grassroots and also approved by himself and his board. The MD is a farm manager, who is keeping our cows and when we the owners want the cows, he cannot stop us from getting them,” he said.
Mr Owere said not all the workers will attain the requisite age and saving time qualifications at the same time to deplete the accounts of NSSF.
“Every month NSSF collects Shs100b. We did research before agreeing on the amendments and it was clear there is enough money to pay workers at least 20 per cent (of their accrued benefits). What Byarugaba is doing is to try and create a situation to sabotage the amendment which he has tried before and failed,” he said.
Workers’ MP Agnes Kunihira, who is also the vice chairperson for the Parliamentary Committee on Gender, Labour and Social Development, which has been processing the Bill, asked the contributors not to worry because “everything will be sorted” when the Bill is passed into law. She said whatever is happening at the moment cannot change the position Parliament took last month.
“As far as I know, mid-term access at 10 years of saving is being generalised because it does not apply to everybody. Contributors will not mark 10 years of saving on the same day because they started saving on different days. But also they cannot make the required age on the same day,” Ms Kunihira said.
Meanwhile, Parliament’s attempt to pass the Bill before breaking for Independence recess hit a dead end on several sittings after the absence of the Ministers supposed to process it. The Bill was tabled the then Minister for Gender Ms Janat Mukwaya early last year but in the process of the Committee’s scrutiny, President Museveni directed that it is taken over by the Ministry of Finance.
Last week, Speaker Rebecca Kadaga said the delay had been caused by the continuous absence of the Minister of Gender Mr Frank Tumwebaze or his junior colleagues to have it processed.
MPs have been opposed to dual supervision of the Fund where the Ministry of Gender is supposed to be in charge of the Social Security component whereas Ministry of Finance takes charge of Investment arm. But, the Committee has since recommended in a harmonization report from a meeting with the two ministries that the proposal be maintained.
Mr Tumwebaze yesterday said that his Ministry is set to take the lead in processing the Bill when Parliament resumes later this month since the Speaker has directed so.
“Following Presidential directive that Finance takes the lead, Hon Bahati (State for Planning) has been doing so and he processed the Bill in the Committee. However, if the Speaker wants us (Gender) to take the lead we shall do so because we are not in any way standing in its way” Mr Tumwebaze said.
Parliament last month approved the mid-term access but failed to strike an agreement with government on the percentage to be accessed by the savers.
After a harmonisation meeting, Mr Alex Ndeizi the Committee Chairperson has since reported to the Speaker saying it has been recommended that mid-term access of 20 percent be granted to contributors aged 45 and have saved for 10 years.
“The principle of midterm access is necessary to cater for unexpected challenges in the life of a member who may need to utilize some of his or her savings as bail out in case unemployment, illness” the report reads in part.
The harmonised view has also catered for contributors who are aged 45 and have failed to get a job for not less than three years after losing the other. These the MPs recommend be allowed to access at least 40 percent of their accrued benefits.
The argument for leaving out those who are aged below 45 and fail to get a new job after losing the previous one is that; “it is usually very difficult for a person advanced in age to be employable”.
The Committee has also recommended that Persons with Disability (PWDs) who remain unemployed for more than one year after losing their jobs should allowed accessing at least 75 percent of their savings.
NSSF statement
NSSF in a Tuesday statement signed by Ms Barbara Teddy Arimi, the head of marketing and communication, said : “Money collected in a given period preceding interest declaration is immediately invested in three asset classes namely; fixed income, equities and real estate.”
The statement revealed that NSSF collected total revenue of Shs1.4 trillion from the asset investments of Financial Year 2019/2020. Of this, Shs1.149 trillion was allotted to members as interest, and the balance was used to offset taxes and operational expenses.
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