News & Up­dates:
November 24, 2021

A sigh of relief hovered over the House Chamber yesterday as lawmakers debated to a conclusion and finally passed the long-awaited for National Social Security Amendment Bill 2021.

After months of filibustering and two solid days of heated debate on several controversial clauses, Parliament on November 24, nodded to a proposal giving NSSF members above the age of 45 that have worked for at least 10 years, the green light to access 20% of their savings.

“Congratulations members, today, I’ll breathe because I have been receiving phone calls and messages from the workers of this country. Parliament has delivered on what it should, to grant the workers of this country- those who qualify-mid-term access benefits of 20%,” the House Speaker Jacob Oulanyah said amid thunderous applause.

Passing of the Bill that now awaits Presidential assent, ministerial guidelines and gazetting caused excitement among MPs and in the public gallery where a number of workers representatives who have been for years agitating for mid-term access on grounds that the resources could help savers engage in income-generating activities to supplement their salaries, domestic development such as housing and most recently with the Covid19 outbreak, cushion them against hard economic times.

NSSF savings, mandatory to Ugandans in formal employment, are currently at the tune of Sh15.6 trillion from a total of 2 million savers of which only 93,000 are above 45 years.

According to the NSSF top management, paying out 20% to members above 45 years means that the Fund will require a total of Sh902b.

The Bill also provided for stringent penalties on employers evading remittance of employees’ benefits.

 

Employers will now be fined 20% of the non-remitted money as well as interest accrued.

The Attorney General, Kiryowa Kiwanuka said that the 20% fine was intended to deter employers from withholding or diverting employees voluntary contribution after it has been deducted.

 

“We propose that a person who fails to remit shall pay a penalty (20% of the amount not remitted) and remit to the fund any outstanding contribution plus accrued interest at the prevailing commercial rate,” said Kiryowa.

In addition to mid-term access, the new law provides that Persons with Disabilities (PWDs) who have saved with the Fund for more than 10 years access up to 50 per cent of their accrued savings.

The new amendment provides that only the mandatory contributors are eligible for midterm access subject to their age and years of contribution, while voluntary contributors will have access to their savings as and when they so wish, subject to the prescribed regulations to be issued by the Minister in consultation with the Board.

Other Clauses that were passed include, section 13A (7) that grants the Minister power to prescribe by regulations and in consultation with the Board, the procedure for making voluntary contributions and benefits.

The House voted to have the Ministry of Gender takes the lead role in handling social security matters while the Ministry of Finance’s role is limited to handling matters on finances and investments of the Fund.

On the powers of the Managing Director the new law as passed trimmed the powers of the Managing Director by revoking his or her voting right as an ex-officio member of the board to avoid conflict of interest.

The House rejected the proposal to amend Section 36B of the Principle Act by Budadiri West MP Nathan Nandala Mafabi to have money got from unidentified persons, be transferred to the consolidated fund within one year of collection.

During the debate, the Leader of Opposition, Mathias Mpuuga proposed for inclusion of access to the NSSF funds by the savers during emergencies.

In response, the Attorney General said that the NSSF Act under Section 24 provides for circumstances under which the Fund can be accessed in whole or in part in case of any emergencies and eventualities.

The Attorney General cautioned against legislating to promote quick access to the funds.

“We need to be mindful that this is a Fund, not a bank so the money is not sitting there. And every time we make these provisions for quick access, it means we are depleting the ability of the fund to invest,” he said.

This NSSF Bill was first passed by the 10th Parliament on February 17, 2021 before it was returned to the House by President Yoweri Museveni.

The Minister of Gender, Labour and Social Development, Betty Amongi said that the Ministry would develop regulations and the board would determine terms and conditions of the said Fund.

“There will be administrative procedures to follow for those who are eligible for midterm access so that things are not done haphazardly,” said Amongi.

Ends…