Monday, March 12, 2018 

Cabinet agrees to amend NSSF Act

The Minister of Gender, Labour and Social Development, Janat Mukwaya, Photo Credit: mbabulefm

KAMPALA, Uganda—The Minister of Gender, Labour and Social Development, Janat  Mukwaya has said Cabinet during its Sitting of Monday 5th March 2018, approved the Proposed Principles to Amend the National Social Security Fund Act Cap 222. 

She said Accordingly, Cabinet authorized her to issue drafting instructions to the First Parliamentary Counsel to draft the National Social Security Fund Amendment Bill, 2018 in accordance with the approved Principles.

Mukwaya notes that the following principles underlie the proposed amendments to the Act and include expanding social security coverage; enhancing efficiency and effectiveness in investment; providing for introduction of new benefits; improving governance; and streamlining appointment of staff to key positions of the fund.
The proposed amendments according to Mukwaya seek to provide that the NSSF Board shall be tripartite and therefore comprised of Government representatives, Employers representatives and Workers representatives. 

It also seeks to amend Sections 39 and 40 of the NSSF Act to provide for appointment of the Managing Director and Deputy Managing Director respectively by the Minister on recommendation of the Board and specify in the law that the term of the Managing Director and Deputy Managing Director be five years renewable once subject to satisfactory performance.

The proposed amendments also seek to amend Section 41 to provide for the appointment of the Secretary by the Board on a contract of 5 years renewable subject to satisfactory performance;

Section 7 of the Act is sought to be amended to provide for mandatory contribution of all workers regardless of the size of their enterprise. Furthermore, provision should be made for voluntary contribution by workers over and above their mandatory contribution and voluntary contributions by self-employed persons.

Consequently under the proposed amendments, all employers registered under the Companies Act, Partnership Act or any other law for the time being in force governing the establishment of business entities should be specified as persons who shall register as contributing employers.

Section 19 will be amended to give the Board powers to introduce new benefits in consultation with the Minister and to provide for mid-term access of voluntary benefits on such terms and conditions that may be set by the Board.

Mukwaya said the Act should be amended to give the Minister power to provide by Statutory Instrument a threshold of expenditure by the Fund prior to approval of the annual budget by the Minister. Furthermore, the Board should be given the discretion to use in house expertise and fund managers in the investments of the scheme funds such amendment to allow NSSF to lend to Government.

Other proposed amendments include to provide for the exclusion by Statutory Instrument issued by the Minister the process of acquiring assets for purposes of earning income or capital appreciation from the application of the Public Procurement and Disposal Act as well as appraisal by the Solicitor General and Government Valuer; To amend the Act to include a provision that any amount of contribution and any other sum together with interest or penalty thereon may be recovered from a third party who owes money to a defaulting employer; To amend that Act to provide that an employer who fails or refuses to remit contributions within the prescribed time may have the business managed by a third party.

Accordingly, Recovery of NSSF contributions shall have priority or ranked pari passu in any instance where property of an employer is seized or sold or otherwise realized in pursuance of an order of attachment in execution of a decree issued by a competent Court; Persons over the age of 60 years shall not pay tax on their benefits; To provide that the annual levy paid by the NSSF to the Uganda Retirements Benefits Regulatory Authority be capped and to amend  sections 44 and 45 of the Act should be amended by increasing the fines for offences under the Act from ten thousand shillings to fifty currency points or imprisonment for a period not exceeding six months or both.

By Samson okwakol, Monday, March 12th, 2018