NSSF Bill will crush Fund, says Byarugaba

Soroti. The managing director of National Social Security Fund (NSSF) has said the proposed Bill that seeks to provide loan facilities in education, health and mortgages, among other benefits, will crush the institution.
While addressing employers in Soroti Town on Tuesday, Mr Richard Byarugaba said on average, payment of Shs15m is made to beneficiaries who clock 55 years but if the money is tagged to such benefits, the 5 per cent contribution by the employee cannot do much to earn a member those benefits.
“What will you do with this money to pay medical, education and housing? Some MPs want us to add on unemployment benefits on the proposed Bill,” he said.
Mr Byarugaba said out of 2.5 million registered members under NSSF, only 800,000 make their monthly contributions.
“Imagine if we have to pay this, the Fund will go broke,” he added.

Proposal
Mr Byarugaba said if savers want more benefits, they should do an additional voluntary contribution of 5 per cent if the components entailed in the proposed Bill is passed.
Last week, the Workers MP, Dr Sam Lyomoki, rallied Parliament to have the NSSF law amended to provide for a loan facility for members who have continuously saved for 10 years, provide for a loan for education, health, housing and unemployment benefits.
Mr Byarugaba said the proposed Bill introduces changes in areas of taxes, saying in the long term when one clocks 55 years, his benefits will be taxed.
“If we exempt this from the current Bill, you will receive a lot of benefits because of the law of compounding, we have researched on this and its working well,” he said.
Mr Byarugaba said under the current NSSF law, the 5 per cent contribution by the employee and 10 per cent by the employer is tax free, including benefits on clocking 55 years, apart from NSSF which is taxed upon making profits after investing members contribution in capital markets.
Mr Byarugaba also sounded a warning to no complaint customers to use the 90 days amnesty to pay outstanding employees social security contributions or have penalties slapped on them.
He said failure to pay with the three month, will attract interests that members missed out, penalty on the principle that the employer has to pay per month for each of his/her employer.
“If you do that you will be forgiven from paying penalties,” Mr Byarugaba said.
Under the amnesty of the 90 days, NSSF is seeking to recover Ush 160Billion from non-complaint employers.