Employers have failed to remit Shs200b to NSSF

Minister of Gender, Labour and Social Development Betty Amongi (left) with the Acting Managing Director of National Social Security Fund, Mr Patrick Ayota (right), and members of Uganda Retirement Benefits Regulatory Authority, Mr Martin Nsubuga (2nd left) and Mr Julius Bigirwa (2nd right) during a press conference at the Uganda Media Centre in Kampala yesterday. PHOTO/ ISAAC KASAMANI

What you need to know:

A total of 420 cases of defaulting employers have been brought to the Labour ministry’s attention. Daily Monitor understands that 213 of the defaulters have been dragged to various magistrate courts across the country

Employers have failed to remit Shs200 billion of their workers’ contributions to the National Social Security Fund (NSSF), the Labour minister has revealed.

Ms Betty Amongi also revealed that only 1.3 million of the 2 million registered employees remit their contributions. Amongst the 1.3 million, 630,000 employers are monthly savers. This means 690,000 accounts are dormant.

The government intends to grow the Fund from the current 1.3 million members to five million in 2025 and 15 million in 2035.

Ms Amongi said for this to happen, employers that don’t remit contributions of their workers have to be called to order. She added that 420 cases of defaulting employers have been brought to her ministry’s attention.

Daily Monitor understands that 213 of the defaulters have been dragged to various magistrate courts across the country.

“NSSF remittance compliance for employers in the formal sector stands at only 51 percent, meaning 49 percent are not remitting contributions of their employees,” Ms Amongi said, adding, “Over 20 cases by employees are in court, seeking recovery of their money not remitted by their employers. However, currently we are not focusing on penalties for the defaulters. We are more interested in engaging them to ensure compliance.”

Mr Patrick Ayota, NSSF’s acting managing director, told this newspaper that only 27,628 employers are actively remitting their employees’ NSSF contributions.

Mr Matia Kasaija, the Finance minister, cautioned employers against defaulting. He reasoned that their actions may increase the poverty and dependence levels among retiring employees. He further urged Ugandans to continue saving with NSSF to increase the mobilisation of domestic savings as well as saving the government from borrowings externally.

“Social mobilisation schemes are an important player in the mobilisation of the pool for financing the country’s projects,” he said, adding, “Equally, these funds can save me from going abroad to borrow because we have got procedures through which the government can borrow from the Fund.”

In an interview, the head of policy and research at the Federation of Uganda Employers, Mr Dan Okanya, said the body is “coordinating with the employers to ensure that they comply with the social securities.”

He added that this is important not least “because there are also some workers who have not appreciated the importance of saving.”

Mr Okanya also urged NSSF to “improve [its] image”, adding that “some of the workers for some reason have lost trust in saving with [the Fund].”

Mr Martin Nsubuga, the chief executive officer of Uganda Retirement Benefits Regulatory Authority (URBRA), assured workers that the recent changes in the management of the Fund won’t jeopardise their savings. He added that the workers’ funds are fully monitored by URBRA.

“We can attest [to] the funds [being] safe because the governing structure of the NSSF is still intact and all its statutory operations are ongoing,” Mr Nsubuga said, adding, “Even those who qualify for mid-term access are advised to go for their benefits.”

Meanwhile, Ms Amongi has defended the Shs6 billion she requested from NSSF’s operational budget. The Labour minister said yesterday the money, among others, is supposed to be used to establish an online system for whistleblowers to report non-compliance by employers, mass registration of both eligible employers and employees, drive mandatory registration in industrial parks and follow up with enforcement in case of defaulting entities.

Ms Amongi also revealed that she reconciled with the National Organisation of Trade Unions’s chairman general, Mr Usher Wilson Owere, after clear-the-air talks on Tuesday.

She added that Mr Owere and his delegation agreed to support the ongoing investigations into the alleged mismanagement of the Fund’s assets by Mr Richard Byarugaba—the immediate past substantive managing director.

In December last year, Mr Owere issued a two-week ultimatum to Ms Amongi to relinquish her ministerial position for allegedly overstepping her mandate in NSSF’s management.