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Is lack of pension to blame for our poor work ethic?

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Added 27th January 2020 06:59 PM

In general, pension funds are paid to you on a monthly basis in lieu of a salary - so it is a monthly earning rather than a lumpsum payment that you could lose or squander all at a go.

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In general, pension funds are paid to you on a monthly basis in lieu of a salary - so it is a monthly earning rather than a lumpsum payment that you could lose or squander all at a go.

By Simon Kaheru

As we go further into a year in which we all hope our personal economic (or financial) circumstances will improve, this week I recalled a revealing moment at a former workplace during a discussion about staff performance there.

That day, my Argentinian colleague Pedro Seambelar approached me with a serious concern, "Tell me Simon," he asked, "I've been here a couple of years and I need help understanding this - why do so many people here get jobs and then fail to take them seriously?"

By that time I had worked with the organisation a few months and knew his pain. He was in charge of growing operations upcountry but his objective was literally a moving target.

His problems were not agricultural in nature - sometimes he couldn't find staff where they were supposed to be, or farmers where staff thought they should be, or crops at the height they were estimated to be, or updates when they should have been sent, or money where it should have been kept.

It confused him how frequently and consistently people under him were always on the verge of being fired.

I understood his perplexity when he asked, "Seriously, don't people want to earn a good pension?".

I told him about our equivalent of the pension scheme and gave him the number of people registered with the National Social Security Fund (NSSF) at that time and he was licked.

See, the way pension funds worked in other countries varied but followed a system. In some countries, people get assigned Social Security Numbers at birth so that all through their lives they keep gathering money to be paid to them when they retired.

In general, pension funds are paid to you on a monthly basis in lieu of a salary - so it is a monthly earning rather than a lumpsum payment that you could lose or squander all at a go.

Pedro explained that the system they followed earned the employee a percentage of their last monthly salary as their pension after they retire.

So, using general figures for illustration: if your last monthly salary was, say, Ushs1million, after you retired at age 60 you earned 70% of that per month till you died; so after retiring you earned Ushs700,000 per month for the rest of your life.

After you died, your immediate dependant was entitled to, say, 50% (Ushs500,000) of your last immediate salary until they also passed on.

The percentages were increased, he explained, according to longevity of service and performance ratings. For persons who were self-employed or even unemployed, there were also schemes for them to earn a pension.

EVERYBODY had to earn a pension so that when they were not capable of working due to old-age they were not a burden on society.

Do not focus on the actual numbers, but consider the strategy:

Employees spent more time, therefore, trying to grow their earnings by working hard and keeping their jobs intact. This also discouraged employees from hopping from job to job, thus retaining skills and talent in one organisation and growing expertise at specific tasks.

Because the social security system was universal - for everybody - there was a general work ethic followed that was driven by an urgent need to continue earning money even after one's more employable years.

And that's where Pedro began to understand the differences. For many people here at that time, there was no visibility of a "pension". Yes - there was the lump sum payout if one retired and had made NSSF contributions, but that came and went in a way few could plan or account for.

They therefore had to find ways of creating their backup plan for after the time they stopped being in employment - stealing from the company or doing a side-job during their ordinary employment time. Our history of formal employment environments, for political and other reasons, was also poor and hadn't created the atmosphere of trust that employees could rely on for pensions to work.

Which meant they couldn't be devoted to their jobs or employment in general - and created that poor work ethic that so perplexed Pedro.

His understanding dawned with a cloud of dismay. By the time he left Uganda he believed little would change if we didn't tackle that one aspect of our workforce and employment environment - move from the lump sum payment to pension funds that created a more long-term "tomorrow" mindset. 

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