The Managing Director of the National Social Security Fund (NSSF), Richard Byarugaba has said that they will have no option but to pay the 20 percent to each saver as long as it is approved by Parliament.
Parliament is currently handling a bill to amend the NSSF Act which among other provisions seeks to expand social security coverage and benefits through enforcing mandatory contributions for all workers in the formal and informal sectors, provide for midterm access to benefits and taxing of benefits for savers who withdraw their savings before attaining 60-years, among others.
The Bill which has been on the shelves of Parliament was dusted after a group of MPs led by Busongora South’s William Nzoghu moved the House to allow for mid-term access to NSSF saving by individual savers to the fund.
Disturbed by the developments in Parliament, Byaruhanga wrote to the Finance, Planning and Economic Development Minister, Matia Kasaija, warning that the fund will crush if it pays the 20 percent to each saver when approved.
In a letter to the finance Minister dated May 5, 2020, Byarugaba says the fund will have to pay at least Shs 3.7 trillion to savers who are affected by COVID-19, but also savers above 55-years, the legal age where one can draw their savings.
He argued that they do not have physical cash but would have to sell treasury bonds to meet benefits payments but also NSSF assets.
Byarugaba has however said that everyone is blaming them for failing to allow Ugandans to access the money, but this problem is not only theirs but also for Members of Parliament.
He said that although the NSSF management is not in support of releasing the funds, because it will stress the funds, the MPs are the ones who should be taking the blame since they are sitting on the law that could have encouraged Ugandans to get midterm access.
“The law doesn’t give us any leeway to help our members, the law that could have given us leeway has been in Parliament since last year and the MPs haven’t agreed who should be in charge of NSSF. And in the meantime the law that should have helped us to help our members during this period is sitting in their interest since last year,” Byarugaba said.
The NSSF boss added that although they are currently being attacked by the public, on social media among others, the people who should be taking the blame should be members of Parliament.
“They have the law that would even allow members to get benefits. We could have been able to do that, but we can’t do that, because we would go to jail,” said Byarugaba.
He says NSSF empathizes with the savers affected by COVID-19 and they would be able to help if the law was passed but hastened to add that all that the NSSF management wanted is to make the policymakers to know the dangers of allowing the access to that money, which they do not have in their accounts.
“NSSF would pay it, but members would know that they would lose money because your balances will be reduced by the loss that we make,” said Byarugaba.
According to Workers MP Sam Lyomoki, the proposal is that Ugandans beyond the age of 45 and those that have saved for 10 years will be the ones to benefit from the proposal.
NSSF assets are at Shs 13 trillion invested in Kenya, Uganda, Tanzania and Rwanda. NSSF has 2.3 million members at the moment. However, close to a half (1m people) have less than 10 million on their accounts. Some 7 percent (161,000) people have balances above 50 million, an indicator that only a paltry of savers have sizeable savings.