NSSF law: Looking beyond mid-term access

A teller in a banking hall. Whereas there are over two million people saving with the National Social Security Fund (NSSF) only 90,000 members qualify for midterm access. PHOTO/file

What you need to know:

Eligibility. Those who  are aged 45 years and beyond - and have saved with the National Social Security Fund (NSSF) for 10 years or more will be granted up to 20 per cent of their contribution. But once that is done, what next?

Excitement around midterm access, largely occasioned by the ongoing effects of the coronavirus continue to linger on even as manoeuvres to tease out legal, technical and operational issues are being dealt with ahead of the roll out expected in the next one and half weeks, Prosper Magazine understands.

This means those who  are aged 45 years and beyond - and have saved with the National Social Security Fund (NSSF) for 10 years or more will be granted up to 20 per cent of their contribution without any qualms.

But once that is done, what next?

“Our request to savers with the Fund is that don’t get excited with this midterm access,” the chief executive officer of Uganda Retirement Benefits Regulatory Authority (URBRA), Mr Martin Nsubuga told Prosper Magazine in an exclusive interview.

According to Mr Nsubuga, whose agency is responsible for supervising institutions which provide retirement benefits products and services, there is more to the NSSF legislation recently signed into law by President Museveni, beyond just the midterm provision which seems to be the centre of attraction. 

This is why URBRA advises that if you don’t have a clear plan, you should not consider accessing midterm payout because you are likely to gamble with the money that is meant to secure your future while in retirement.

Instead, the sector regulator encourages you to leave your savings with the Fund to grow it for you for rainy days. If you must access it, then you don’t have to cash out the whole 20 per cent. You can do 5 per cent or 10 per cent and leave the rest to grow.

The new law allows for a saver who is 45 years and above or a member who has contributed to NSSF for at least 10 years to be eligible for mid-term access

Beyond midterm…

It will not be long before the midterm excitement dies out as sector players and the regulator believe “it is merely a temporary reprieve that is not in the long term interest of the members.”

“The idea of midterm access impairs the entire principle of accumulating your savings for retirement. Besides the amount that members normally contribute to the Fund is not that huge,” Mr Nsubuga told Prosper Magazine last week.  

In the long run, beyond the midterm exhilaration, the retirement sector regulator says the NSSF (Amendment) Act, 2021, will streamline the industry’s governance.

Sector players including the regulator believe that from the governance perspective, the disorder previously experienced will be no more, thanks to the NSSF (Amendment) Act, 2021, that deals with the matter.   

“We see a more structured law that recognises how the Fund is going to be governed in terms of clear representation. Issues around terms of office and subsequently the professional requirement of people who are going to be entrusted as trustees or directors are well addressed in this legislation.

“In the broader spectrum, it is going to support penetration. Remember the previous law had restrictions of who should be a member of NSSF. It was being tied to an employer-employee partnership. With this law, anybody can become a member of NSSF. In principle, it is an opportunity to create a platform for individuals who would have loved to join NSSF but could not,” says the URBRA boss.

There will also be a level of comparison which will help the population make informed decisions in terms of who is offering “me a good return or who has better products.”

This is in addition introducing more innovations to what is already available. For example, what more can be done around the long-term solution to old age poverty “which may not be addressed by lump sum payments alone anymore or even by midterm withdrawals,” Mr Nsubuga notes.

 He continues: “One innovative way is to preserve the funds but ensure members’ cash flow in retirement is sustained instead of being given a lump sum which can easily be wasted in the first two or so years. There is more room for innovation and ideas that this legislation paves way for unlike before.”

Although the regulator had already started thinking about the preservation of funds or introducing payment in phased manner, the legislation provides an opportunity for that to come to life in a comparative basis. For example, it is now possible to compare entities in mandatory saving schemes with those in voluntary ones, providing people with an opportunity to make good decisions on where and how to save.

Paltry cog

As for the Workers Representative in Parliament of Uganda, Mr Charles Bakkabulindi, the midterm access is simply a paltry cog of the entire legislation. In any case, if the Covid-19 pandemic didn’t happen, this conservation (midterm access) wouldn’t have attracted the intensity it has generated in the last one and half years.  

For Mr Bakkabulindi, the achievements resulting from the NSSF (amendment) Act such as reverting total control of workers issues, particularly on matters concerning savers contributions to the Ministry of Gender, Labour and Social Development, is far stronger in terms of weight than the issue of midterm access. 

“Bringing it [NSSF] from Ministry of Finance to its rightful home is a great achievement. This now means Ministry of Gender, Labour and Social Development will institute the board and as a result, there will be a direct relationship between the owners of the money in this case the workers and NSSF,” Mr Bakkabulindi notes.

He continues: “The legislation provides room for ideas that previously wouldn’t be considered. At some point we can have a proposal that NSSF lends directly to banks and not vice versa. Our members will then be treated to affordable loans by the nature of that arrangement with selected financial institutions.  Something like this can only be feasible with the Fund being under Ministry of Gender and not Finance who by the nature of their work have no emotional connection with workers.”

For supervisory purposes, the Ministry of Finance is also relieved of the responsibility of being the complainant, prosecutor and the judge over workers savings.

“We don’t want to see bad things that happened elsewhere happen with our Fund. A case in point is when Uganda Railways core assets were sold by Ministry of Finance. I can tell you that many years down the road, Uganda Railway is still demanding the ministry more than Shs32 billion. We are not prepared to take the same risk. That is why we believe that being housed at the Ministry of Gender, Labour and Social Development is such an achievement.” 

More choices

The chairman of the National Organisation of Trade Unions, Mr Usher Wilson Owere, notes that the amended NSSF legislation is revolutionary in many aspects, including beyond midterm access although workers Union had to fight tooth and nail to ensure this provision is part of the introduced law. 

He says: “The Bill offers many things. One of them is opening up for other workers who have not been saving with NSSF to do so on voluntary basis. This means that of the 14 million workforce in Uganda, the current number of about 2 million people saving with NSSF could double if not multiply within few years.

“In addition to midterm access, the law is targeting 14 million people in the country’s workforce, majority of whom are not saving. If properly enforced, it will improve the savings culture in the country.


However, the NSSF managing director, Mr Richard Byarugaba while presenting the Fund’s performance for Financial Year 2020/21 at its headquarters in Kampala, noted that the Fund is dynamic enough to adapt, embrace these changes and thrive.

“The last two years prove that the Fund is resilient and growing. In addition, we have, over the last year, prepared ourselves to implement provisions of the NSSF Amendment Bill once it is signed into law,” Mr Richard Byarugaba told journalists.


According to the Minister for Gender, Betty Amongi , whereas there are over two million people saving with the National Social Security Fund (NSSF) only 90000 members qualify for midterm access.

“Only a member who is 45 years of age and above and has made contributions to the fund for at least ten years, is eligible to mid-term access to his or her benefits, of a sum not exceeding 20% of his or her accrued benefits but also a member  who is a person with disability, is 40 years of age and above and has made contributions to the fund for at least ten years, is eligible to mid-term access, of a sum of 50 percent of his or her accrued benefits,” Amongi said addressing journalists at the Uganda Media Centre recently.

She noted that the members who are eligible for the midterm access will share a sum of Shs902.5 billion.


Section 24A of the Bill provides that “a member who is forty-five years of age and above and who has made contributions to the Fund for at least 10 years is eligible to mid-term access to his or her benefits of a sum not exceeding 20% of his or her accrued benefits”.

The NSSF law will open up to all workers including those in the informal sector. If properly implemented, he foresees the membership of the Fund increasing from 2 million to over 10 million in the next three to five years.   

Once this operationalisation of the law is due, the Fund will be able to among others:  extend social security coverage to more Ugandans. 

 Improve the adequacy or value of benefits to members.

 Provide mid-term benefits to members during their working life that cover short-term to long-term needs such as unemployment/income replacement, education, medical and housing.