Finance experts react to NSSF reforms
Sep 14, 2010
EXPERTS have applauded the proposed reforms in the National Social Security Fund (NSSF), which would, among others, reduce payment age to 45 years from the current 55 years.
By Vision Reporters
EXPERTS have applauded the proposed reforms in the National Social Security Fund (NSSF), which would, among others, reduce payment age to 45 years from the current 55 years.
Labour minister Emmanuel Otaala welcomed the amendment, describing it as a move towards empowering those who lose their jobs.
“The rate at which Ugandans are losing jobs is high. Getting paid at the age of 45 will enable jobless people invest elsewhere,†he said.
Otaala promised to support the amendment when the Cabinet meets to consider the proposals.
Gordon Asiimwe, the Leads Insurance business development manager, said it is embarrassing for one to die before the age of 55 without their money.
“The life expectance for Ugandans is lower than 55 years. It does not make sense to put the beneficiary’s years above that,†Asiimwe noted.
Steven Jjingo, the acting executive director Federation of Uganda’s Employers, said the amendment is long overdue because at 45 years, one can reasonably invest their benefits or take charge of investments because they are still strong at that age.
Florence Munyirwa, the Uganda Human Rights Commission spokesperson, welcomed the move and asked that Cabinet discusses the Act fast so that people can access their money.
“The move for contributors to use their savings as collateral for loans is good because most workers in Uganda receive little salaries,†said Munyirwa.
Banking experts also welcomed the move. Ruth Musoke, a Stanbic Bank official, said reducing the age will help people to access the funds, when they are energetic enough to plan for their families.
Robert Muhangi of Tropical African Bank said the Government should ask banks to reduce the interest rates for those who want to access loans.
However, Dan Musiime, the legal secretary of Jubilee Insurance, was against the move.
“The purpose of saving is for members to have a fallback position (financially) when they are no longer productive either by way of advanced age or permanent impairment,†he said
“At 45 years, workers are still productive and allowing them to access their savings at an early age may make them misuse the funds by engaging in unproductive ventures.
Also ,early withdrawal from pension programmes rarely have good long-term impacts on companies,†Musiime argued.
He noted that such savings encourage the most creative, risk-oriented and productive employees to leave, while those who have doubts about their ability to compete elsewhere remain.
The effect of this, Musiime argued, may be the emergence of a small labour pool, which will inevitably cause problems to both companies and the economy.
Another proposed amendment is for NSSF contributors, who have saved for over 10 years, to access 30% of their savings to solve urgent medical or social problems.
Reported by Patrick Jaramogi, Brian Mayanja, Justine Nakitende and Andrew Ssenyonga
EXPERTS have applauded the proposed reforms in the National Social Security Fund (NSSF), which would, among others, reduce payment age to 45 years from the current 55 years.
Labour minister Emmanuel Otaala welcomed the amendment, describing it as a move towards empowering those who lose their jobs.
“The rate at which Ugandans are losing jobs is high. Getting paid at the age of 45 will enable jobless people invest elsewhere,†he said.
Otaala promised to support the amendment when the Cabinet meets to consider the proposals.
Gordon Asiimwe, the Leads Insurance business development manager, said it is embarrassing for one to die before the age of 55 without their money.
“The life expectance for Ugandans is lower than 55 years. It does not make sense to put the beneficiary’s years above that,†Asiimwe noted.
Steven Jjingo, the acting executive director Federation of Uganda’s Employers, said the amendment is long overdue because at 45 years, one can reasonably invest their benefits or take charge of investments because they are still strong at that age.
Florence Munyirwa, the Uganda Human Rights Commission spokesperson, welcomed the move and asked that Cabinet discusses the Act fast so that people can access their money.
“The move for contributors to use their savings as collateral for loans is good because most workers in Uganda receive little salaries,†said Munyirwa.
Banking experts also welcomed the move. Ruth Musoke, a Stanbic Bank official, said reducing the age will help people to access the funds, when they are energetic enough to plan for their families.
Robert Muhangi of Tropical African Bank said the Government should ask banks to reduce the interest rates for those who want to access loans.
However, Dan Musiime, the legal secretary of Jubilee Insurance, was against the move.
“The purpose of saving is for members to have a fallback position (financially) when they are no longer productive either by way of advanced age or permanent impairment,†he said
“At 45 years, workers are still productive and allowing them to access their savings at an early age may make them misuse the funds by engaging in unproductive ventures.
Also ,early withdrawal from pension programmes rarely have good long-term impacts on companies,†Musiime argued.
He noted that such savings encourage the most creative, risk-oriented and productive employees to leave, while those who have doubts about their ability to compete elsewhere remain.
The effect of this, Musiime argued, may be the emergence of a small labour pool, which will inevitably cause problems to both companies and the economy.
Another proposed amendment is for NSSF contributors, who have saved for over 10 years, to access 30% of their savings to solve urgent medical or social problems.
Reported by Patrick Jaramogi, Brian Mayanja, Justine Nakitende and Andrew Ssenyonga