Liberalising social security needs a lot of care
Oct 20, 2008
ON September 26, leaders of workers’ organisations met a Cabinet sub-committee headed by the Vice-President, Prof. Gilbert Bukenya, following our plans to stage a demonstration protesting the manner in which workers’ savings with the NSSF are mismanaged. We had three major demands to the Governm
By Sam Lyomoki
ON September 26, leaders of workers’ organisations met a Cabinet sub-committee headed by the Vice-President, Prof. Gilbert Bukenya, following our plans to stage a demonstration protesting the manner in which workers’ savings with the NSSF are mismanaged. We had three major demands to the Government.
The first demand was that the board and management of NSSF should be dismissed. This follows the Temangalo land purchase being investigated by Parliament, the IGG’s report on corruption in NSSF and the workers’ loss of confidence in the Fund. Cabinet refused to dismiss the board on grounds that the investigation by Parliament were almost complete.
The second demand was that the representation of workers on the NSSF board should be increased from one to five. The board has 10 members. The Government appoints nine members and one slot is for the workers’ leader. Workers are the main stakeholders and their interests could not be protected if they had only one representative. Five would ensure the workers would have veto powers to reject bad investments.
The third demand was implementing recommendations of the Social Security Sector Transition Group (STG), which called for a new law to cater for reforms in the social security sector. This means repealing the NSSF Act 1995. We agreed that by December 31, the reforms should be in place.
Therefore, out of three demands we succeeded on two and failed on one (dismissal of the board and management). This means that we got 90% of our demands. On that basis, we suspended the demonstration as we monitor implementation of the agreement.
We shall review whether to go on with the demonstration or not after a few weeks. If nothing is implemented, we shall we go for industrial action in form of strikes, cessation of work in all sectors like textile, hospitality, plantation, health and education. We have a long struggle. Once we go into demonstrations there will be no turning back.
If we remain quiet vultures will continue eating up NSSF. NSSF is a den of thieves. We are rebuking the recklessness of the Government in making workers lose their savings. Money in NSSF is seen to be growing because they are not giving it to workers.
There are questions as to why we negotiate with the Minister of Finance who sanctioned the Temangalo land transaction and is also a partner with security minister Amama Mbabazi and Amos Nzeyi in the National Bank of Commerce.
We are not going to stop until we achieve the interests of the workers. It is through reforms that workers will get value for money. The struggle is not for individuals; it is for all workers.
It is coordinated by workers’ leaders from the National Organisation of Trade Unions and the Central Organisation For Free Trade Unions. When we talk about reforms in the social security sector, we are also talking about liberalisation. But we have to be careful. If you over-liberalise, NSSF can become vulnerable.
You can have a system where if people are not happy with NSSF they can opt out of it. We need liberalisation but workers should not be left to market forces or the whims of private people.
Under the NSSF Act, we have five benefits:
We have the age benefit paid at 55 years whether member is still employed or not;
We have benefits paid at 50 years to a member who is out of employment for two years.
Another benefit is what we call invalidity benefit, paid to members who become physically, mentally and permanently incapacitated.
The survivors’ benefit is paid to dependants of a deceased member. Then there is the emigration grant paid to a member who has been working in Uganda and is leaving Uganda permanently.
Then there is withdrawal benefit which is paid to members who assume employment exempted from making contributions where there is another scheme for pension, like the public service.
The above benefits are narrow and out of touch with reality. We want the benefits to be increased. Why should the age benefit be 55 years and yet life expectancy is 51 years? The age benefit should be lowered to 45 years. We want new benefits like unemployment benefits. If a worker saves for 10 years and he loses a job say at 35 years, why can’t he be given part of the money before he reaches 50 years?
Medical insurance should also be part of the package. Why should the Government come up with a new Social Health Insurance where they want to make new deductions? In other countries Social Health Insurance is part of the social security. People have problems like funerals which can also be included in the benefits.
There are administrative benefits like workers being given a loan from NSSF and the savings can be used as security to get loans instead of going to banks which get money from NSSF at low interest rates.
The writer is the Workers’ MP and also the General Secretary of the Uganda Medical Workers Union
As told to John Odyek
ON September 26, leaders of workers’ organisations met a Cabinet sub-committee headed by the Vice-President, Prof. Gilbert Bukenya, following our plans to stage a demonstration protesting the manner in which workers’ savings with the NSSF are mismanaged. We had three major demands to the Government.
The first demand was that the board and management of NSSF should be dismissed. This follows the Temangalo land purchase being investigated by Parliament, the IGG’s report on corruption in NSSF and the workers’ loss of confidence in the Fund. Cabinet refused to dismiss the board on grounds that the investigation by Parliament were almost complete.
The second demand was that the representation of workers on the NSSF board should be increased from one to five. The board has 10 members. The Government appoints nine members and one slot is for the workers’ leader. Workers are the main stakeholders and their interests could not be protected if they had only one representative. Five would ensure the workers would have veto powers to reject bad investments.
The third demand was implementing recommendations of the Social Security Sector Transition Group (STG), which called for a new law to cater for reforms in the social security sector. This means repealing the NSSF Act 1995. We agreed that by December 31, the reforms should be in place.
Therefore, out of three demands we succeeded on two and failed on one (dismissal of the board and management). This means that we got 90% of our demands. On that basis, we suspended the demonstration as we monitor implementation of the agreement.
We shall review whether to go on with the demonstration or not after a few weeks. If nothing is implemented, we shall we go for industrial action in form of strikes, cessation of work in all sectors like textile, hospitality, plantation, health and education. We have a long struggle. Once we go into demonstrations there will be no turning back.
If we remain quiet vultures will continue eating up NSSF. NSSF is a den of thieves. We are rebuking the recklessness of the Government in making workers lose their savings. Money in NSSF is seen to be growing because they are not giving it to workers.
There are questions as to why we negotiate with the Minister of Finance who sanctioned the Temangalo land transaction and is also a partner with security minister Amama Mbabazi and Amos Nzeyi in the National Bank of Commerce.
We are not going to stop until we achieve the interests of the workers. It is through reforms that workers will get value for money. The struggle is not for individuals; it is for all workers.
It is coordinated by workers’ leaders from the National Organisation of Trade Unions and the Central Organisation For Free Trade Unions. When we talk about reforms in the social security sector, we are also talking about liberalisation. But we have to be careful. If you over-liberalise, NSSF can become vulnerable.
You can have a system where if people are not happy with NSSF they can opt out of it. We need liberalisation but workers should not be left to market forces or the whims of private people.
Under the NSSF Act, we have five benefits:
We have the age benefit paid at 55 years whether member is still employed or not;
We have benefits paid at 50 years to a member who is out of employment for two years.
Another benefit is what we call invalidity benefit, paid to members who become physically, mentally and permanently incapacitated.
The survivors’ benefit is paid to dependants of a deceased member. Then there is the emigration grant paid to a member who has been working in Uganda and is leaving Uganda permanently.
Then there is withdrawal benefit which is paid to members who assume employment exempted from making contributions where there is another scheme for pension, like the public service.
The above benefits are narrow and out of touch with reality. We want the benefits to be increased. Why should the age benefit be 55 years and yet life expectancy is 51 years? The age benefit should be lowered to 45 years. We want new benefits like unemployment benefits. If a worker saves for 10 years and he loses a job say at 35 years, why can’t he be given part of the money before he reaches 50 years?
Medical insurance should also be part of the package. Why should the Government come up with a new Social Health Insurance where they want to make new deductions? In other countries Social Health Insurance is part of the social security. People have problems like funerals which can also be included in the benefits.
There are administrative benefits like workers being given a loan from NSSF and the savings can be used as security to get loans instead of going to banks which get money from NSSF at low interest rates.
The writer is the Workers’ MP and also the General Secretary of the Uganda Medical Workers Union
As told to John Odyek