ALLOW WORKERS TO BORROW FROM NSSF SAVINGS

Allow workers to borrow from NSSF savings
Dr Sam Lyomoki, one of the Workers’ MPs, has belatedly woken up to suggest that he will move a private members bill to amend the National Social Security Fund (NSSF) Act- the law that was meant to regulate and safeguard the workers pension fund. Even so, the MP’s suggested amendment(s) are largely targeted to the ‘juicy’ positions on the NSSF board which are of little consequence and no benefit at all to the toiling workers who are required by law to make monthly contributions/savings to this run-down Fund.

Before we even consider the merits and demerits of Dr Lyomoki’s proposed amendments, the leadership of this country needs to be reminded that apart from being at the core of the very survival of our national economy, (the total value of the Fund as of June 30, 2009 was Shs1.3 trillion with rations at 70 per cent fixed deposit, 10 per cent equity and 20 per cent real estate) the safety of workers’ savings is of great national concern. This is particularly so because at Shs1.6 trillion, the fund represents 21 per cent of our Shs6 trillion national budget.

The extent of the irregularities and criminality identified in the recent audit of NSSF did not only reveal a web of manipulation and insider dealings but also outright fraud. It is further apparent from the auditor’s report that some of the criminal actors in the NSSF saga are engaged in money dealing schemes at the expense of the principal beneficiaries of the fund who are the workers. This criminal impunity is also evidenced in part, from the court records in the case of NSSF versus Alcon.

The cost of this wanton behaviour doesn’t need a rocket scientist to fathom. Just about two years ago the workers had been promised a 14 per cent interest benefit on their accumulated savings. Now, after the reported fraud at Workers House, and just a year after the 14 per cent interest promise, the managers have had the audacity to tell the beneficiaries (workers) that their savings can only attract a paltry 2.5 per cent interest representing a massive 12.5 per cent decline annually. What a shame!

And yet, in typical Ugandan style, the workers who are the shareholders of the fund (owners) continue to be, for lack of a better word, gullible to these manipulations and daylight robbery.

But much as Ugandans are generally known for being indifferent about national issues, surely the estimated 300,000 members of NSSF can for once push for fundamental reforms in the pensions sector.

The idea of amending the NSSF Act should not be limited to the composition of the board because that alone will not be of any direct benefit to the workers. Instead, the law should be amended to eliminate the monopoly being enjoyed by the government-run NSSF. Workers should be at liberty to save their money with competent service providers in order to realise maximum benefits accruing from their savings.

The age at which members can access their savings should also be lowered from the current 55 to 40 years- given that the national life expectancy is 47 years. But perhaps the most fundamental reform needed in the pensions sector now, is to allow members to borrow against their savings. Workers should be allowed to employ their savings as security to acquire personal development soft loans at very affordable interest rates not exceeding 12 per cent annually.

National organisations like NSSF must not be meddled with for political expediency because the ramifications can be quite insurmountable. This is the more reason why the government should make an enduring positive difference by prevailing over the NRM-dominated Parliament to save the workers the agony of unrealised dreams.

Mr Sserwanga is journalist and advocate
msserwanga@gmail.com