By Mary Karugaba and Samuel Sanya
Over 27,000 workers could lose their savings as National Social Security Fund (NSSF) because their employers provided scanty detailsto the National Social Security Fund (NSSF).
Richard Byarugaba, the NSSF managing director, said the fund has only names and no details of the 27,000 workers with savings amounting to sh24.6b that has been placed on the fund’s suspense account following instructions by the Auditor General. He explained that the money will be paid out only when the rightful claimants are identified.
“We have decided to put this money on a suspense account until we get full details of the owners. I want to assure you that this money is safe and will only leave this account when the rightful owners come up,” Byarugaba said. NSSF currently has a membership of 500,000 workers.
Byarugaba was speaking during the NSSF 1st annual members’ meeting at the Kampala Serena hotel yesterday.
“The issue of the suspense account is a problem of the past. This was because the fund and the employers were not organised. The employers were not giving us sufficient information. Today, you pay in the bank and your money is directly deposited on your account,” he explained,
He added that some employers make lumpsum deposits to cover their member contributions, without submitting a detailed schedule that has the names of the individual contributors to whom the funds belong.
Byarugaba informed the members that the fund’s balance sheet has grown 70% to sh3trillion for the year ended June 2012, from sh1.7trillion. He further informed members that the fund’s monthly contributions have grown from sh28b to sh50b. He attributed the growth to increasing membership, improved compliance levels and implementation of the relationship management model.
“Monthly benefits paid out have grown from sh9b to sh12b. Average benefits processing time has improved from 105 days to 18 days,” Byarugaba said, to applause from members. He noted that with the current collection rate of over sh4b per day, the available investment opportunities are not enough to absorb NSSF investment potential.
“What is needed are strategic domestic long-term investments that can absorb this huge local savings pool,” he said.
Workers representatives against liberalisation
During the meeting, the workers representatives opposed the Government move to liberalise the sector, saying they were never consulted and that the move will put workers’ money at risk of being swindled.
Robert Wanjusi, the Trade Union chairperson said NSSF should be protected. “We oppose the proposal by the Ministry of Finance to disintegrate the NSSF. It was brought in a bad spirit to only benefit the investors. The interests of the workers were not so much considered,” Wanjusi said.
“We have agreed that we shall do everything possible to oppose the proposed Bill. Liberalisation is very dangerous because it does not address the needs of the people. The law says, members can access some of their money after a period of 10 years, that perpetuates poverty,” he said.
Other members from the audience also expressed concern over the proposed Bill, saying the Government risk workers’ money by keeping it with investors, who have often times stolen government money and then disappeared.
“I prefer that the money is controlled at a central point so that its monitored by the Government. Some investors come here without anything and trusting them with members’ money will be risky,” a member said.
But NSSF board chairman Ivan Kyayonka assured the members that NSSF supports the liberalisation proposal because its ready to compete with other players. “I look at it as an opportunity. We are the best players in the game and there should be no reason to fear,” he said.