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Gender committee approves NSSF midterm access

Gender Committee chairperson Flavia Kabahenda on the floor of Parliament.

Kampala, Uganda | THE INDEPENDENT | The Gender, Labour and Social Development Committee of Parliament has approved the 20 percent midterm access for National Social Security Fund (NSSF) savers aged 45, and have saved for 10 years.

The NSSF bill which among other things sought to allow for midterm access of NSSF was passed by the 10th Parliament, but a ruling by the Speaker of Parliament Jacob Oulanyah guided that all business of the 10th Parliament not assented to had lapsed and needed to be reconsidered.

Initially, the bill proposed that savers aged 45 years old and those who had saved for at least 10 years qualified for midterm access, however, the President objected to this, guiding that only those who were 45 and had saved for 10 years should be able to access the midterm.

The government also wanted to provide for dual supervision of the Fund, putting the Ministry of Gender in charge of the social security arm of the Fund, which deals with the welfare of workers and their savings while the Ministry of Finance, would supervise the investment arm which deals with the business component where savings are invested in assets to generate income.

The President however wrote to Parliament objecting to the suggestion for dual supervision of the fund. He advised that the split oversight mandate would cause delays in decision making and create loopholes for corruption. Based on the guidance, the 10th Parliament voted to retain the supervision of the fund under the Ministry of Finance. The President also guided that the NSSF managing director be a member of the board with voting rights, but also rejected the proposal on 75% access for persons with disability who cease to be employed for one year.

The committee has now recommended that the Gender Ministry be responsible for the supervision of NSSF.

The chairperson of the committee Flavia Kabahenda says that the Ministry of Finance is ably represented on the NSSF board and the benefits of the entire retirement sector, and there is no need to have them manage the fund.

While making a presentation to Members of Parliament on Wednesday, Kabahenda said that the committee is confident that the fund will continue to grow even when placed under the Ministry of Gender, Labour & Social Development.

The committee also rejected the proposal to have the managing director of NSSF sit on the board of NSSF with voting rights. They propose that the managing director should remain an ex-officio member of the board.

“The committee is concerned that giving the managing director a right to vote will create a fertile ground for conflict of interest, for he or she would be part of the organ that recommends for his/her appointment and to which he or she accounts,” she says.

The committee has also upheld the proposal to have the law come into force within 60 days of the publication of the Act in the gazette except for a section on midterm access which will come into force on a day to be agreed by the minister by a statutory instrument on the advice of the board.

The committee welcomed the provision for voluntary contributions saying it is an avenue to increase social security coverage and promote a savings culture.

However, they rejected the proposal to have NSSF recover money from third parties, saying engaging defaulting employers will expose workers savings to endless protracted court battles which may be costly.

It approved the 20 percent midterm access for savers who are 45 years old and have saved for 10 years. However, the committee says that this means a saver could be given less than the 20% depending on the availability of funds. The committee states that there needs to be an instrument to manage this.

“The committee further notes that the proposal gives the minister discretion to provide for mid-term access to eligible members, a sum not exceeding 20% of a member’s benefits. This discretion allows the minister to provide a sum less than 20%.” the report reads.

On access for persons with disabilities, the committee has approved 50 percent midterm access for persons with disabilities aged 40 years who have saved for at least seven years.

The committee also deleted the clause that restricts the number of times a member can be paid their age benefit saying it is unfair for members.

On sections of the principle act that provides for the closure of a member’s account upon attainment of the age of 60 years, hence granting the Minister powers to dispose a member’s money into the reserve fund. The committee notes that this is contrary to the provision which seeks to ensure voluntary contribution beyond the age of 60.

The committee proposes that dormant NSSF accounts be published yearly, provision of more time before member’s funds can be moved to the national reserve and also allow voluntary contributions to those above 60 years.

The Minister of Gender Betty Amongi said the bill introduces stringent punishment for those who deduct savers money and fail to remit.

The Deputy Speaker of Parliament Anita Among suspended the debate on the report for members to internalize and read the report before it can go for the third reading. Among said most of the MPs in Parliament were new and therefore need to understand the proposals before the debate.

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