Workers aged 45 and have saved with the National Social Security Fund (NSSF) for 10 years will hope to flock to the banks to access 20 percent of their savings after Parliament on Wednesday approved midterm access.
Parliament presided over by Speaker Jacob Oulanyah on Wednesday afternoon passed the NSSF Amendment Bill, 2021 that was re-introduced to the House after President Museveni declined to assent to the one that was passed by the 10th Parliament.
“I think today I will breathe because on a daily basis, I was receiving phone calls from workers asking about this Bill” Speaker Kadaga said after the Bill was passed.
The call for midterm access was accelerated by workers’ unions and Members of Parliament after the first lockdown to stop the spread of Covid-19 hit hard many Ugandans who had lost their jobs. At the time, the government had tabled amendments to the NSSF Act.
As a result, Parliament amended Section 24 of the Principal Act by insertion Section 24A which introduces mid-term access to the law, something that is likely to delight the workers.
NSSF Managing Director Richard Byarugaba and the Ministry of Finance last month assured Parliament that there was enough money to offset the midterm access of 20 percent to contributors who have already clocked the age of 45 and have saved for 10 years.
Contributors who fail to get employed after losing their jobs will have to wait until they attain the age of 45 to be allowed to access at least 40 percent of their savings.
Persons with Disabilities (PWDs) who contribute to NSSF and fail to secure a new job one year after losing the previous one, will be allowed to midterm access of 50 percent of their accrued benefits.
Dual supervision
Government succeeded in amending Section 12 of the Act to provide for dual supervision of the Fund. The Ministry of Gender will be in charge of the social security arm of the Fund. This deals with the welfare of the workers and their savings.
Meanwhile, the Ministry of Finance will supervise the investment arm of the Fund which deals with the business section where savings are invested in assets to generate income.
This amendment attracted debate during the House Committee stage but Betty Amongi the Minister for Gender, Labour and Social Development managed to convince the MPs.
When the Bill was first passed early this year, the MPs had insisted that the NSSF be supervised by the Ministry of Gender which is charged with the social security of all the workers. This is one of the reasons President Museveni returned the Bill to Parliament as he had reservations over the amendment.
In the build-up to Wednesday’s passing of the Bill, the President had a meeting with the representative of the Workers Unions, Workers MPs, Minister of Gender, Minister of Finance and the Government Chief Whip to thrash out outstanding issues.
The amendment also comes with a stringent punishment for employers who will be found guilty for not remitting their employees’ contributions. If assented to by the President, the punishment will be three years imprisonment or a fine of 75 currency points or both.
Also the appointment of the Board of NSSF will be by the Minister of Finance with the approval of Parliament.
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