Pension regulator wants NSSF name changed

The Uganda Retirement Benefits Regulatory Authority (Urbra) has said the National Social Security Fund (NSSF) is not a social security institution and seeks to change the latter’s name to a provident fund.

“The use of the words ‘social security’ in the name of the fund is misleading. NSSF doesn’t carry out a function of social security,” Mr Martin Nsubuga, the Urbra chief executive officer, told Members of Parliaments on a joint parliamentary Committee of Finance and Gender last week.

To justify his submission, Mr Nsubuga quoted Black’s Law dictionary, 10th edition, which defines ‘social security as a doctrine or belief that government should provide a minimum level of economic security and welfare for citizens and their families. Government money that is paid to people who are out of work, ill or old. It is money that is paid out as part of a social security programme’.

He then proposed that the Fund’s name be amended to a provident fund in the NSSF Amendment Bill of 2019.
In addition, Mr Nsubuga wants the Ministry of Finance to be in-charge of the funds as opposed to the Ministry of Gender.
“NSSF is a provident fund, which receives contributions from employers and employees for purposes of providing retirement income for the employee. It is a non-bank financial institution which contributes heavily towards the sustainability of the financial sector. It should be regulated as a retirement benefits scheme,” he said.

Earlier, NSSF managing director Richard Byarugaba told the committee that out of the country’s Shs30 trillion economy, NSSF controls Shs11 trillion, almost 40 per cent of the economy.
But Workers MP Sam Lyomoki and NSSF tax manager, Mr Stephen Kikule, have disagreed with Urbra insisting NSSF gives social security to individuals on areas that are not limited to old age but also in sickness, invalidity and death.

During the meeting, Dr Lyomoki advised that NSSF investment plan is only supposed to enable the members retain value in the money they have saved with the Fund over the years.
“Your role is to regulate not to create new things. I see your explanations and how you want this Fund to be. Then why are you regulators? Why is NSSF not at Bank of Uganda if you say it is a financial institute?” Dr Lyomoki inquired.

He added: “If I was your minister, I would fire all of you. I am shocked to hear that a regulator, supposed to assist government and the public, is now trying to kill the social security. This NSSF has both social aspect and economic. Because we don’t want workers’ money to lose value, NSSF goes for investments. But if a person is sick and wants the money, you shouldn’t fail to give it because you want to invest it or are waiting until they are in old age. No, this money is not for dead people.”

Validity of URBRA’s claims

In a separate interview with Daily Monitor, Mr Kikule said: “I don’t think Urbra’s statement is valid. What Urbra wants is a different way of doing things but all is social security. It is about guaranteeing a person an income in old age, invalidity, out of employment. You can give it in a lump sum or the way government runs the pension.”
NSSF is also seeking to cap the annual levy they pay Urbra but the latter has warned the former to back off.

Mr Lyomoki said NSSF paid their regulator, Urbra, last year Shs4 billion which is likely to increase to Shs5.7 billion this year.
He added that there is need to cap the money paid to Urbra since it’s administrative costs remain constant but the contribution has over the years increased.

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