A survey conducted by the Uganda Retirement Benefits Regulatory Authority and Uganda Bureau of Statistics has indicated that only 57 percent of the companies assessed are registered with National Social Security Fund NSSF while 43 percent are not registered.
According to the Executive Director Uganda Bureau of Statistics, Ben Paul Munghereza from the survey most of the institutions do not want to even talk about how their catering for their employees when it comes to their retirement policies.
Also, according to the 2016 employment benefits Baseline survey carried out by Uganda Bureau of statistics, about 68% of the employers they interviewed showed no retirement plans for its employees.
The survey reveals that the highest benefits establishments provided by employers to its employees are allowances which account for only 14% and gratuity at 9.9% and pension at 5.5%.
Commenting about the report, The UBOS Executive Director, Ben Paul Munghereza says companies employing more than five people by law are supposed to save its employees money in a retirement benefit scheme like NSSF.
He says if employees are not sure about their life after work, they will not be compelled to work harder.
Meanwhile, the workers MPs want the Pension Reforms Bill Shelved.
The four Workers MPs, Arinaitwe Rwakajara, Margaret Rwabushaija, Agnes Kunihira and Dr. Sam Lyomoki say the bill is a huge risk to workers savings.
The workers MPs who were appearing before parliament’s finance committee chaired by Rubanda East MP Henry Musasizi noted that it is the mandate of government to ensure and enhance social security and protection of all citizens.
Hon. Margaret Rwabushaija said that liberalising the pension sector would mean that government is denying citizens the access to social security and exposing employees’ contributions to high risk in the hands of speculators who only invest in profitable ventures.
Hon. Arinaitwe Rwakajara also expressed reservations about liberalising the pensions sector saying that workers are likely to end up losing their money at the hands of profit makers.
He highlighted an interpretation of accrued benefits in the bill to mean that in the event a private fund makes losses in its investments – contributor savings will be wiped out.
Dr. Lyomoki said that the workers MPs have decided to reintroduce the NSSF amendment Act of 2009 in order to make NSSF more competitive in the investment market.
Dr. Lyomoki argues that the liberalisation bill is not being pushed by the government in the interest of workers and the economy, but for the benefit of international financial market players who intend to get their hands on the over seven trillion shillings in savings at NSSF.
Hon. Rwabashaija argues that liberalisation will not automatically translate into higher coverage but on the contrary coverage will drop as research in other countries has shown. She stated a few examples including Uruguay where social security coverage dropped from 55 percent to 51 percent in eight years following liberalisation.
The Retirement Benefits Sector Liberalisation bill, 2011 seeks to repeal the Pensions Act, Cap 286 and the National Social Security Fund Act, Cap. 222. The bill seeks to open up the pension sector that will consequently end the monopoly of the National Social Security Fund-NSSF. It also seeks to allow those who have saved money for more than 10 years to access 30 per cent of their savings to secure mortgages or loans from any financial institution for the purchase of a house.