How men and women will share NSSF money

People register for mid-term access at Workers House last week. This is applicable to people of 45 years or older and people with disabilities. Photo/Stephen Otage

What you need to know:

Mr Richard Byarugaba, the Fund managing director, says few women are in high-paying employments and make a higher monthly contribution

There are slightly twice more men than women eligible to claim National Social Security Fund (NSSF) midterm benefits, highlighting the gender disparity in Uganda’s employment sector.
However, each of the fewer women will on average walk away with Shs3 million more cash than a man, according to our analysis of the Fund data.
In sum, the average pay-out to a woman in mid-term disbursement grosses Shs21m while a man pockets Shs18m, suggesting many men are earning and remitting to NSSF much less money every month, giving a comparably lower average.
Mr Richard Byarugaba, the Fund managing director, said the alternative explanation is that few women are in high-paying employments and make a higher monthly contribution.

And because there are just about half women as men contributing to the hitherto private sector workers’ pension scheme, their average accrued benefits when computed as an average would still be higher even if they were being paid similar salary as men.
The mid-term access is an outcome of the amendment last year to the National Social Security Fund Act which, among others, has opened the way for a member to withdraw 20 percent of their accrued benefits if the claimant is aged 45 years and has contributed for at least 120 months.

If the member is a person with disability, they can get up to half of their benefits. The changes enable government employees, who until now relied on Ministry of Public Service-run pension scheme, as well as self-employed individuals to save with NSSF.
The Fund estimates it will rake in Shs90b monthly from the expanded contributor base in addition to the current Shs100b remittance by existing employers.   
As NSSF began disbursing the mid-term claims last Friday, ahead of the initially planned March 17 start date, up to 11,179 claimants had applied for mid-term benefits in a record four days.

However, it is expected that not all the 41,000 contributors qualified for mid-term access will turn up to take a portion of their contributions before they turn quinquagenarians (50 and 59 years old), in which case they would receive all their accrued benefits with full interest.
The mid-term payments are being made with a 2.5 percent interest, much lower than the usual two-digit annual interest declaration, although officials said this year’s interest will drop due to the mid-term access pay-out which for the first time will made the Fund’s cash outflows outstrip inflows by about Shs300b.

Our analysis of the NSSF data shows that of the 41,000 contributors eligible for mid-term access, 28,008 are male representing 68 percent.  Females make up 32 percent, or 13,116 in absolute terms.
Analysts say gender disparity in NSSF membership, whereas not conclusive, does mirror similar trends in mainstream Public Service where an entrenched culture of patriarchy in the country meant more boys than girls went to school and advanced to the world of workforce and, with it, the wealth bracket.

The Fund contributors, which under the old law meant workers of an entity with five employees or more, constitute only two million of Uganda’s working, according to official statistics.  Of these contributors, just about half are consistently active and compliant.
Records show that some contributors are disadvantaged by their employers who deduct but irregularly remit, or fail to remit, the 15 percent equivalent of a joint employee’s salary and employer’s top-up contribution.

NSSF is due to pay out Sh793b in mid-term benefits to all qualifying members with men taking the lion’s share of Shs513b, while the women will receive a consolidated Shs279b if all turn up for partial withdrawals. On average, therefore, each female will receive Shs21m, against a man’s Shs18 million.
Among the successful applicants are more than 2,500 females, qualified to withdraw Shs48.8b, while men, who are claiming Shs120b, number 8,000.
NSSF says it plans to pay Shs50b every Thursday and eclipse Shs1 trillion in both mid-term, and annual, benefits pay-out by year-end.

About 90,000 members initially thought to be eligible, which put expected NSSF cash outflow at Shs1t excluding the annual benefits claim, were knocked out at the last minute after Gender and Labour Minister Beti Amongi maintained in the mid-term regulation the main Act’s definition of an eligible claimant as a member aged 45 or older and who has contributed, instead of being a member, for a decade.
The latter would suggest that a person who has maintained an account with NSSF member for 10 years would be eligible for mid-term, irrespective of whether they contributed for a year or under a decade.

This definition, which was the position in the draft NSSF mid-term access regulation before the Solicitor General’s office advised otherwise, has gained traction after two NSSF Board members, including former Workers’ Member of Parliament Sam Lyomoki, broke ranks to argue that a requirement of 120 months’ contribution was a “misinterpretation of the law”.
Mr Usher Owere, the chairman-general of National Organisation of Trade Unions (Notu), has joined the fray, arguing that exclusion of individuals with staggered contributions over a 10-year period in a country with high unemployment was “unfair”. 

He has vowed to fight until more of the NSSF members qualify for mid-term benefits.
The Attorney General, Mr Kiryowa Kiwanuka, as well as Mr Byarugaba, argued that the only way to include those with less than 120 months contributions for mid-term benefits is if the mother Act is amended by Parliament.


In an interview about the gender disparity in access to mid-term benefits, Mr Byarugaba said women doing similar jobs as men get paid less, although there are outliers in good numbers with handsome take-home.

World Bank report

The World Bank in its Uganda Economic Update report tilted, Putting Women at the Centre of Uganda’s Economic Revival, released last year, revealed glaring pay gaps between women and men, attributed to gender discrimination.
The report shows that young women earn 25 percent less than young men. Before March 2020, the median monthly nominal male wage orbited around Shs250,000, higher than the average Shs140,000 for women.  
 But due to the pandemic that the government and international institutions said affected women disproportionately, the median monthly wage for women has since plummeted to Shs100,000, according to the World Bank report.