KAMPALA, UGANDA: President Yoweri Museveni has finally assented to the National Social Security Fund (Amendment) Bill 2021 into law which okays midterm access, the DailyExpress has learnt.
The development was confirmed by the Senior Presidential Press Secretary Lindah Nabusayi in a tweet passed out on Tuesday afternoon.
“President Museveni has assented to the NSSF Bill as amended,” Nabusayi tweeted on Tuesday.
Assenting the bill into law means workers who have saved for over 10 years and have reached 45 years of age are allowed 20% midterm access to their savings with NSSF.
This NSSF Bill was first passed by the 10th Parliament on 17 February 2021 before it was returned to the House by President Museveni and later re-tabled by the 11th Parliament after the lapse of business of the previous Parliament.
During the debate of the Bill, MPs agreed that only mandatory contributors are eligible for midterm access subject to their age and years of contribution, while voluntary contributors will have access to their savings as and when they so wish, subject to the prescribed regulations to be issued by the Minister in consultation with the Board.
The new law under section 13A (7) furthers grants the Minister power to prescribe by regulations and in consultation with the Board, the procedure for making voluntary contributions and benefits.
“The law alone does not allow you to access these funds; we shall put up regulations and the board will determine terms and conditions. So, there will be administrative procedures to follow for those who are eligible for midterm access so that things are not done haphazardly,” Betty Amongi, Minister of Gender, Labour and Social Development said.
The Attorney General, Kiryowa Kiwanuka guided that whereas voluntary contributors will not be subjected to the terms and conditions under Section 24A as amended, the procedures for them to make their contribution or access their savings will be regulated.
“We need to be mindful that this is a fund not a bank so the money is not sitting there. And every time we make these provisions for quick access, it means we are depleting the ability of the fund to invest,” he said adding that, ‘there will be conditions for voluntary savers to guide them on withdrawals but not as of when they want. In that way you will voluntarily enter into the agreement fully aware of when you can get the money’.
On the supervisory role of NSSF, Parliament also voted that the Ministry of Gender takes the lead role in handling social security matters while Ministry of Finance’s role is limited to handling matters on finances and investments of the Fund. This has been one of the most contentious clauses in the Bill
The new law as passed also clipped the powers of the Managing Director by revoking his or her voting right as an ex-officio member of the board to avoid conflict of interest.
As passed, section 13 (A) of the new NSSF Act will also provide a tough deterrent penalty to employers who deduct a voluntary contribution and fail to remit to the fund. In accordance with the new law (as passed), an employer who offends this section will pay 20 per cent of the amount deducted but not remitted.