Both President Yoweri Kaguta Tibuhaburwa Museveni and National Social Security Fund (NSSF) Managing Director Richard Byarugaba may not be happy if recommendations made by Parliament’s Gender, Labour and Social Development Committee regarding the NSSF Amendment Bill, 2021.
Months ago, President Museveni declined to assent to the bill over controversial provisions on how the Fund would be managed.
Consequently, the bill lapsed and had to be reintroduced in the 11th Parliament.
The bill seeks to expand social protection coverage through initiatives such as voluntary contributions and making workers in the informal sector eligible to contribute to the fund, thus providing remedy to the poor saving culture in the country, according to Committee Chairperson Flavia Kabahenda.
The bill also seeks to include a provision on mid-term access provision to allow savers access a percentage of their money when they are in great need, especially in the wake of the Covid19 pandemic the economy.
In her report presented before the Parliament on November 03, Kabahenda, also the Kyegegwa District Woman MP, recommended that NSSF be placed under the Ministry of Gender, Labour and Social Development (MoGLSD) instead of the Ministry of Finance, Planning and Economic Development (MoFPED), something Matia Kasaija and his boss Museveni may not like.
“It is the observation of the Committee that the Ministry of Finance, Planning and Economic Development is ably represented on the board of directors of NSSF and the entire retirement benefits sector and has a say in how the finances and investments of NSSF are handled,” The Kabahenda Committee recommended.
“Placing social security under the supervision of the Ministry of Finance, Planning and Economic Development would compromise the effective running of the scheme. The committee is confident that the fund will continue to grow even when placed under the Ministry of Gender, Labour and Social Development (MoGLSD).”
The previously bill that Museveni refused to assent to had put NSSF under the finance ministry. There had also been proposals to put the business and investment arm of the Fund under MoFPED and the social security aspect under MoGLSD.
But Museveni had opposed this on grounds that dual supervision would delay decision making.
The Committee also recommended that the NSSF MD should remain an ex-officio member of the NSSF Board, who shouldn’t hold any voting rights.
“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,” said Kabahenda.
OTHER RECOMMENDATIONS
In Kabahenda’s words…
“Mid-term access aims to provide benefits for members of the fund in the interim. At the same time, the Committee is alive to the fact that there is need for a balance between providing members interim access to benefits while at the same time ensuring that members have benefits when they retire.
“The committee notes that there is no consideration of mid-term access for persons with disabilities, which runs counter to the need for equity and Uganda’s Constitutional obligation for affirmative action.”
The Committee welcomes the introduction of penalties for employers who deduct voluntary contributions on behalf of their employees and fail to remit the same to the fund. This is a deterrent, builds trust and should encourage more workers to join the fund.
