NSSF, workers clash before Museveni over mid-term savings

President Museveni has said he will take any decision on the long-awaited National Social Security Bill in two weeks’ time after further consultation.

The Bill proposes that savers aged 45 years and above can get at least 20 percent of their savings.

On the other side, officials from the Ministry of Finance have openly opposed the proposals saying the fund cant be sustainable if over shs2.9 trillion is withdrawn as mid-term access to savings.

On Wednesday, the meeting called by the president between workers representatives including  Peter Werikhe, Usher Owere, Charles Bakabulindi and COFTU representative Dr. Sam Lyomoki  and Ministry of Finance officials led by Minister Matia Kashaija and NSSF Managing Director, Richard Byarugaba turned stormy.

The workers said while they had agreed with the NSSF that only workers who are 45 years and have saved for ten years be allowed mid-term access of 20 percent of their savings, they were shocked to learn that the wording had changed to (45years or 10 years savings).

“When we talked about mid-term, we met with all the stakeholders including NSSF. Workers who have reached 45years and have contributed for ten years are 100,000 that is about 800bn. Parliament instead said 45 or 10. At 45, many people have challenges,” Werikhe told the meeting.

According to Werikhe, who is also the NOTU Secretary-General, there is a lot of misinformation regarding the matter stemming from NSSF and Ministry of Finance officials.

The workers also disputed NSSFs decision to use Shs 500,000 – 1,000,000/= as the measure for the incomes earned by workers arguing that in reality, Ugandan workers earn between 200,000/= and 600,000/= which is way below what was decided by NSSF.

NSSF stand

However, during the meeting, NSSF Managing Director, Richard Byarugaba had earlier said the total fund now stands at shs15 trillion and that each worker saves between 25 and 30 years as well as earning shs150 million.

He said if they access their savings now, they will lose up to shs30 million in 20 years.

Byarugaba said the fund would also lose money because it would offer securities at a discount in a fire sale.

Museveni’s take

At the end of the meeting, President Museveni said he had realised there is conflicting information and change in information regarding the bill and said he would push his decision to assent to it for another two weeks.

“Let us give ourselves two weeks and conclusively solve this matter. I want to be clear with the figures. I am going to do my own research. Let us meet on August 4^, 2021,” Museveni said.

He noted that he wants to do more research on the figures after the workers representative said Shs 800bn was needed for the Mid-term access while NSSFs Byarugaba said they may need up to Shs 3trillion.

The president also raised various issues including how the mid-term access will affect workers savings and what happens to the fund.

NSSF savings

NSSF is a government agency responsible for the collection, safekeeping, responsible investment and distribution of retirement funds from employees in the private sector who are not covered by the government retirement scheme.

As part of the savings scheme, employees contribute 5% of the monthly pay to NSSF while their employers top up 10% to make it 15% saved for employees per month with NSSF.