Workers speak out on mid-term access rules

Kyegegwa District Woman MP and chairperson of the Gender Committee of Parliament Flavia Kabahenda (left) speaks to NSSF managing director Richard Byarugaba after appearing before the committee at the Kampala Serena Hotel on October 14, 2021. Photo / File

What you need to know:

  • The NSSF Amendment Act, 2021, which granted access to mid-term benefits (20 percent) for savers who are 45 and above and have saved for 10 years, as well as persons with disabilities who are 40 and saved for 10 years (50 percent), mandated the minister of Gender Labour and Social Development, under which the Fund falls, to issue the regulations within 60 days after the Bill was enacted into law.

Stakeholders have welcomed the issuance of the regulations that will guide the payment of the National Social Security Fund (NSSF) mid-term benefits, with some saying they are fair enough, while others say amendments will be necessary.

The NSSF Amendment Act, 2021, which granted access to mid-term benefits (20 percent) for savers who are 45 and above and have saved for 10 years, as well as persons with disabilities who are 40 and saved for 10 years (50 percent), mandated the minister of Gender Labour and Social Development, under which the Fund falls, to issue the regulations within 60 days after the Bill was enacted into law.

Yesterday, this newspaper ran a story detailing the regulations that are ready to be gazetted on Friday.

According to the National Social Security Fund (Mid-term Access to Benefits) Regulations, 2022, claimants will be required to submit a copy of the national identification card or other identification document, show a preferred method of payment including bank, mobile money or any other method approved by the managing director of NSSF and provide a NSSF Number.

According to the regulations, processing payment should not exceed 60 days from the date of receipt of application.

Mr Wilson Owere, the chairperson of the National Organisation of Trade Unions, said the identification regulations were fair, but added that the payment period should be shortened.  The organisations had proposed a 30-day window for processing of payment.

“What we want is for them to be within the law, we do not want them to change anything. Presenting an identity card, that is to confirm that you are the real owner of the money. They are fair, where there is a problem, we shall always amend,” Mr Owere said.

He added: “It should even be less than 60 days. For us we were saying it should be 30 days, that is what we recommended. 60 days is too long, since NSSF have already worked on their systems, I would think it should take 14 days like the ordinary payout.”

The managing director of NSSF, Mr Richard Byarugaba, said they are ready to effect the payments as soon as the ministry of Gender gives a go ahead.

The Fund undertook a system upgrade to align with mid-term access, and has also made sure the cash, approximately Shs1 trillion, is available for the nearly 100,000 beneficiaries.

Persons with disabilities, will, in addition to other requirements have to submit a medical or expert report confirming the disability.

Interest rates

The regulations, in line with the Act, state that claimants who withdraw their benefits between July and October will earn a 2.5 percent interest rate. This is because the withdrawals will be made before the new interest rate is issued.

Mr Sam Lyomoki, the secretary general of Central Organisation of Free Trade Unions, said they might consider advising their members to wait, so as to earn the interest rate paid in October.  He says all the other regulations were discussed except for the interest rate.

“If I go in June and they give me the 2.5 percent, but in October they announce a rate of 10 percent, then they will have cheated me because the rate is for the whole year. We are also going to discuss that part. You cannot give me the lowest rate,” he said.

Ms Flavia Kabahenda, the chairperson of the Parliament Committee on Gender, declined to comment, saying they were yet to receive the regulations.

Mr Byarugaba also explained that the interest rate for next financial year will most likely be lower because of the pay- out, and how it has affected the Fund’s investment portfolio.

“We needed a trillion shillings and we have not been investing it in long-term bonds, but in short-term instruments because we have been preparing for the last six months. Look at the difference between a fixed deposit of eight months and a bond of 20 years.

If you invest in a 20-year bond, which is what we were investing in before, you get 15 percent, if you go into 91 days, which is what we have done, you get six percent. So definitely we will pay less interest,” he said.

Background

Parliament passed the National Social Security Fund (Amendment) Bill, 2021 on November 24, 2021.

The House voted to amend Section 24A of the principal Act to allow workers who are 45 years and above and have saved for at least 10 years to have a mid-term access of up to 20 percent of their savings, whilst persons with disabilities (PWDs) who have saved with the Fund for more than 10 years can have access of up to 50 per cent of their accrued savings.

The NSSF Bill was first passed by the 10th Parliament on February 17, 2021 before it was returned to the House by President Museveni and later re-tabled by the 11th Parliament.

In January, President Museveni signed the Bill into law. Source: Parliament of Uganda


What they say on rules...

Abdu Kalema, Energy expert

The rules are good for verification purposes because you may be in the system but another person presents your documents. It is important to positively identify the person who presents the papers.

Albert Mucunguzi, communications officer.

Let us look at the bigger picture. At 45 you are old and I am sure that the picture of you that NSSF has currently, is of when you were younger.

Annet Alenyo, Medical doctor

Those are fair conditions given that you are dealing with money, my concern though is with people with disabilities especially those upcountry, how will they access the offices to get their money?

Issa Ssekito, PRO, KACITA.

Are they different from the usual documents we use to access money? Let me think through it before I can make a comment.

Judith G Amoit, Communications specialist

They are being unfair because if you know that someone has been saving all these years with you, that means you have their information. Why take a person through all that hassle?

Juliana Kaggwa, PRO, UBL

I do not know about the new conditions they have put in place. I need to familiarise myself with them before I can make a comment.

Ronnie M Egwang, media personality

I am a firm believer in processes and systems. By the time they require you to have certain things that means there is some level of organisation. I support organisation.

Ndugu Omongo, social worker

I am happy that government has accepted the mid-term access but all these new requirements show that NSSF is not yet ready to pay out the money.

Rosemary Mutyabule, business consultant 

What they are asking is for you to confirm your current address and ensure that it is updated and since they are dealing with a number of applicants, they must have an audit trail.

Sandra Ejang, Entrepreneur.

They seem reasonable. Let us do things properly and familiarise ourselves with the requirements because these are requirements needed by most banking institutions.

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