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Speaker Jacob Oulanyah chairing the session that passed the NSSF Bill

Parliament Passes Long-awaited NSSF Bill to Give Workers Midterm Access

posted onNovember 24, 2021
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Workers who have attained the age of 45years and above and have saved for more than 10years can now have midterm access of up to 20% of their accrued savings after Parliament on Wednesday passed the long awaited National Social Security Fund (Amendment) Bill, 2021.

The new Act of Parliament will also allows Persons With Disabilities (PWDs) who have saved with the Fund for more than 10 years to have access of up to 50% of their savings.

While debating the report of the Committee on Gender, Labour and Social Development on the NSSF Bill, MPs agreed that only mandatory contributors are eligible for midterm access subject to their age and years of contribution, while voluntary contributors will have access to their savings as of when they so wish subject to the prescribed regulations to be issued by the Minister in consultation with the Board.

The Attorney General Kiwanuka Kiryowa guided that whereas voluntary contributors will not be subjected to the terms and conditions under Section 24A as amended, the procedures for them to make their contribution or access their savings will be regulated.

“We need to be mindful that this is a fund not a bank so the money is not sitting there. And every time we make these provisions for quick access it means we are depleting the ability of the fund to invest. So there will be conditions for voluntary savers to guide them on withdrawals but not as of when they want. In that way you will voluntarily enter into the agreement fully aware of when you can get the money,” Kiryowa said.

The new law as passed under section 13A(7) furthers grants the Minister power to prescribe by regulations and in consultation with the Board, the procedure for making voluntary contributions and benefits. Parliament also voted that the Ministry of Gender takes the lead role in handling social security matters while Ministry of Finance’s role is limited to handling matters on finances and investments of the Fund.

The new law as passed also clipped the powers of the Managing Director by revoking his or her voting right as an ex-officio member of the board to avoid conflict of interest. As passed, section 13 (A) of the new NSSF Act will also provide a tough deterrent penalty to employers who deduct a voluntary contribution and fail to remit to the fund. In accordance with the new law (as passed), an employer who offends this section will pay 20 per cent of the amount deducted but not remitted.

In addition, the House also amended section 34(2) and (3) of the Principal NSSF Act to allow continued voluntary saving even after the age of 60 as an avenue to increase social security coverage and promote a saving culture and also provide for the board powers to publish names and details of all dormant accounts in a newspaper of wide circulation and further provide for more time before a member’s contributions can be deposited into the reserve account.

This NSSF Bill was first passed by the 10th Parliament on 17, February, 2021, before it was returned to the House by President Yoweri Museveni and later retabled by the 11th Parliament after the lapse of business of the previous Parliament. The Act of Parliament will again wait to be assented to by the President in accordance with Article 91 of the Constitution.

“Today, I will breath. I have been getting phone calls and phone calls from the workers of this country. Parliament has delivered on the bill and the workers can now have midterm access of 20% of their savings,” Speaker Oulanyah said before suspending the House.

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