MPs, government disagree on who to control NSSF cash

BY: Eyalama In Business, News On

The passing of the National Social Security Fund (NSSF) Amendment Bill 2019 was yesterday deferred to next week after Parliament hit a stalemate on the clauses about which ministry should supervise the workers’ fund.
The House was also divided on the government proposals that deal with workers’ mid-term access to their savings.

The government side led by Gender minister Frank Tumwebaze and State Minister for Finance in charge of Planning David Bahati failed to persuade MPs to allow the NSSF be managed by the Ministry of Finance.
Legislators insisted NSSF should be supervised by the Ministry of Gender, Labour and Social Development, which by law is responsible for social security in the country.

While processing the Bill at the House committee stage, the MPs had rejected the government proposal in Clause 13, which seeks to amend Section 31 of the current Act to provide for the minister responsible for Finance to be the supervisor of NSSF.
“We have not come out clearly to the ministry to supervise the fund. I think we need to maintain that the minister responsible for Gender remains the principal superviser of the fund and then the Ministry of Finance can only come in on the side of investment,” Ms Cecilia Ogwal, the Dokolo Woman MP, said.

Since the Bill’s tabling last year by then Gender Minister Janat Mukwaya, there was a clash between Finance and Gender committees on which one was supposed to scrutinise the Bill.
As a result, the Bill has been processed jointly by both committees, which would sit together while interfacing with different stakeholders.
Initially, the Bill was giving oversight to the two ministries with Finance responsible for creating checks and balances in determining borrowing from the fund and interest payable to savers while Gender ensuring social protection policies.


Last updated: October 28, 2020 - 5:14 am (+00:00)

Mr Bahati told Parliament yesterday that the Ministry of Finance has been supervising the fund ever since President Museveni made a directive to that effect following a Cabinet resolution.
“It is a position of the President and government that this fund, given its strategic position, should be managed by the minister responsible for Finance.  Leaving the clause on lending to the government will not let the Bill serve the purpose for which it was brought,” Mr Bahati said.

His colleague, Mr Tumwebaze, said: “This matter was discussed in Cabinet extensively and all the arguments you are raising came up and it was agreed in Cabinet that one     ministry should supervise the fund. The President made a decision and as Ministry of Gender, we agreed to this position.”
The two ministers told the House that by the decision of Cabinet, the fund has already been supervised by the Ministry of Finance with Mr Bahati saying it has been on for more than “10 years”.
However, MPs  William Nzoghu (Busongora  North) Elijah Okupa (Kasilo County) and Arinaitwe Rwakajara (Workers) raised suspicion that the government wants to “abuse” the fund by Finance influencing direct borrowing from NSSF.


Last updated: October 28, 2020 - 5:14 am (+00:00)

Mr Nzoghu said the explanation of the ministers showed that they had come to the House to express respect for the President, who is the appointing authority but not the interest of the contributors to the fund.
Mr Rwakajara said allowing the Ministry of Finance to supervise the fund will contradict the role of the Uganda Retirement Benefits Regulatory Authority (UBRA) Act , 2011, which supervises all the pension schemes, including the NSSF. UBRA is housed under the Ministry of Finance and the MPs say there is no need for the minister to come in the picture.

“I don’t see why we should bring in the Minister of Finance unless we repeal the UBRA Act. This double reporting put the work of UBRA in a tricky situation,” he said.
With lack of consensus between the MPs and the ministers, Speaker Rebecca Kadaga decided to halt the debate on Clauses 13 to 18 because they all influence the management of the fund.
“Let us stand over these clauses. I want to have a look at the UBRA Act and the principal Act to see how it moves with this,”  she ruled.


Last updated: October 28, 2020 - 5:14 am (+00:00)

Mid-term access

Earlier on, the House had failed to agree on the mid-term benefits of savers, especially on the proposal contained in Clause 11, which seeks to amend Section 24 of the current law to determine when this should be done and how much be taken.
The joint committee in its report had suggested that workers who have saved for at least 10 years and are aged 45 be allowed to access 20 per cent of their total benefits. But, two minority reports suggested otherwise.

Mr Kenneth Lubogo (Bulamogi) in one minority report proposed that a contributor who loses a job and remains unemployed for a period not less than three years should be allowed to access 40 per cent of their savings to deal with the challenges of unemployment.
Mr Nandala Mafabi (Budadiri West) and Mr Anthony Okello (Kilak North) in another minority report suggested that mid-term benefits of 30 per cent be accessed after 15 years of saving, 10 per cent five years after a saver fails to find a job after losing one, and 5 per cent for contributor affected by disaster for six months.

The Speaker referred these contestations back to the joint committee for scrutiny before returning on Wednesday next week with a harmonised position for the Bill to be passed.
Parliament also supported and considered together with the Bill a motion by Mr Nzoghu, arguing that the government should allow contributors affected by the effects of the Covid-19 on the economy to access part of their savings with NSSF

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