Kampala — Workers who want to access their savings with the National Social Security Fund (NSSF) before clocking the mandatory age of 55 will have a reason to smile should Parliament pass proposed changes in the law governing the Fund.
Section 20 of the NSSF Act, Cap 222 of 1985, provides that members saving with the Fund can only access their benefits when they clock 55 years. The law in this regard considers 55 as the retirement age for its members.
However, Cabinet sitting at State House Entebbe on Monday, approved the principles for the amendment of the NSSF Act Cap 22 of 1985 with the new changes that will include allowing workers to access their benefits mid-term in their careers.
Yesterday, Ms Janat Mukwaya, the minister for Gender, Labour and Social Development, told journalists at the Uganda Media Centre in Kampala that the NSSF board would have authority to determine conditions under which members can access part of their savings before clocking 55 years.
The press conference was convened by junior Housing minister Chris Baryomunsi on behalf of ICT and National Guidance minister Frank Tumwebaze, who is also the official government spokesperson.
"The amendment of the Act has an objective of providing for mid-term access of voluntary benefits on such terms and conditions that may be set by the Board," Ms Mukwaya said.
She said Cabinet agreed that the amendment will provide an opportunity of transforming the Fund from "Provident Fund offering lump sum benefits to a hybrid-scheme offering both lump sum and pensions."
Ms Mukwaya also said there is a proposal to amend Sections 39 and 40 of the NSSF Act to have the term of office of the managing director and deputy of the Fund increased from four to five years and renewable once.
Also to be amended is Section 7 of the NSSF Act to give way for mandatory contribution of all workers regardless of the size of their enterprise.
"We want to amend Section 7 of the Act 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," she added.
The government also wants the amendment to allow the NSSF to lend to the government so as to reduce long-term loans from foreign agencies to carry out critical projects.
The government has been acquiring loans from the World Bank, and the African Development Bank, among others, for financing infrastructure.
Cabinet also resolved to retain NSSF as the sole recipient of mandatory contributions of workers because it has demonstrated "steady progress" in its performance with a current total assets worth about Shs9 trillion. This, Ms Mukwaya said, will now render irrelevant the Retirement Benefits Sector Liberalisation Bill 2011.
The Bill that has been before Parliament since it was tabled in 2011, seeks to liberalise the retirement benefits sector to provide for fair compensation among licensed retirement benefits scheme for mandatory contributions.
But the amendment will now also see government opening up NSSF to all Ugandans who may voluntarily wish to save in the Fund for their future benefits.
Mr Usher Wilson Owere, the chairman of National Organisation of Trade Unions, in a tweet, welcomed the Cabinet decision, saying the amendment would save the worker's money.
"We thank President Museveni and your Cabinet for that strong support to save workers' funds. God bless you," Mr Owere wrote.
Authority. Ms Janat Mukwaya, the minister for Gender, Labour and Social Development, told journalists at the Uganda Media Centre in Kampala that the NSSF board would have authority to determine conditions under which members can access part of their savings before clocking 55 years.
Plan. She said Cabinet agreed that the amendment will provide an opportunity of transforming the Fund.