Weakness of NSSF amendment Bill

Relatedly, since social protection is one of the four pillars of Decent Work Agenda, there is need for the inclusion of a section in the NSSF Act that provides for regular actuarial studies which would not only help to give direction on how to transform NSSF benefits into a social insurance scheme that guarantees regular and predictable income transfers to members in form of pension but also, constant adjustment of benefits levels in line with wage and price increases, considering the fact that social protection is a human right and therefore, it’s essential to provide workers with freedom from fear and insecurity.

When workers have a sense of security, it helps them to concentrate on their jobs, which increases their productivity levels and incomes. Research has shown that a provident fund paid to beneficiaries in lump sum does not protect workers during old age since such money is spent within the first two years of retirement. Such actuarial studies would help to guide investment of the NSSF money into meaningful businesses and prevent mismanagement of workers’ savings.

The Bill should also provide for portability of savers benefits when one changes jobs to another with a different social security scheme. While a person is at liberty to withdraw his/her savings from NSSF should he/she gets a job in the public service as per the current regulations, it’s more complicated when one moves from public service to the private sector. One has to have served for a minimum of 10 consecutive years besides other conditions in order to qualify as a pensioner in the public service. Otherwise, if someone who has been in public service for nine years decides to join the private sector, he/she will lose their benefits in the public Service Pension Scheme (PSPS).  Therefore, there is need for legislations that provides for portability of a person’s benefits from PSPS to NSSF account and vice versa, and if one moves from or to another country within the East African Community. We need legislations capable of appropriately shaping the retirement security systems so that they can respond to the prevailing demographic, economic, and workforce trends. And such legislations can only be arrived at through a tripartite consultative system where the views of each party are given equal consideration.

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The writer works with Federation of Uganda Employers in the department of policy and research