Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1694431938764.pdf (Uganda)
BILrIi SUPPLEMENT No.

l0 2atl S.pac.bCr, 2021 AILI,sSUPPLEMENT to fl* llgo,fu Ccctk tio 70. ld,/,,,e CXlli &kd 21rh Selneabat m20 Printcd by UPIt.

l.intebbc.

by Ordcr ofthe Govc tlcnL Bill No.

19 Natiotpl fuial &curity Fund (Anendnent) Biil 2021 THE N/\TIONAL SOCIAL SECURITY Ft ND (AMENDMENT) BILL,2O2I MEMORANDUM I. POLICYANDPRINCIPLES.
The policy behind th€ Bill is lo expond social sccurity coveragc by making contributions to thc National Social Sccurity Fund mandatory for all workers in the formal sector and also allowing worters in the formal and informal socton to make voluntary contributions to the National Social Security Fund.

ln addition, the Bill seeks to enhance the spectrum of benefits available to workers and to improve management of the National Social Secuity Fund.

2.

DEFECTSINTHEEXISTINGLAW.


The current law was enacted in l9t5 and does nor @utely address emerying challenges in the managenrent of social sccurity in Uganda.

The proposal to amend the NSSF Act panhularly arises from thc need to sbeamlane the managemenl ofthe Fund to expand the scope ofsocial security coverage and benefits.

The Act in its cunent slate does not make express provision for the represenlation of workers, employers and other stakeholders on the board of dircctors.
The appoinrnent of the Managing Dir€ctor ard Deputy Managing Dircctor by the Minister without the participation of thc board undermincs the abilily of the board to supervise thern.

Bill No 19 Natioral ftlr,ial &curity Futd (Anendnenr) Bil m2l Further, although it is in the best intcrest of all employoes to slve for the Act curentty gives the Ministcr discretion l,o determine r€tirement, thc category of ernployees who are eligible to contsibute for their lelircmcnt.
Currently, only workers in a company lhat employs 6vc or more ernployees are eligible to contribute for their retirpment which conlradics Paragraph Vll of the National Objectives of Directive Principles of State Policy uder the Constitution, thc ILO Convention 102 on social securily urd the Socid Protection Policy 2015 which all call for social security coverage of all persons regardless of the number of their employees.

ln addition.
ln addition.

expcnditure by the Fund is srbject to approval of the annual hrdgct by thc Minister.

However, the Acl doos not mske provision for a window for limited experdinrre prior to approval of thc annrol brdget by the Minister.
Bcsides, despitc fi€ Ngh cost of private furd manager, scction 33 of the Ugur& Retircment Beocfits Regulatory Authority Act, 201 I requires that all frrnds of a rctirrmcnt benefits scheme should be invesced through a privarc fee charying furd manager yet sorne of thc invesmcnls like the buying and selling of Government Socuritics can be done morp cost effoctively in-house by National Social Sccurity Furd.
Thc Acl provides for tuation of contibutions and scheme incomc which does not promote the culture of domcsric toog tcrm savings that h crilical for sustained oconomic nansformation.

ln addition, whereas the filing of annual returns by employers is imporran for purposes of monitoring workers'conlributions.

failure to do so is not an ofrcnce under the Act.

Therefore, ensuring compliance in the abscncc of legal sonctions is difficult.
Fimlly, lhe frnes of ten thousand shillings in fie Act can no longer serve the purpose for which they were imposed.

There is neod therefore to amend the law to address the above defects 3.

RDMEDIESPROPOSEDTODEALWITHTHEDEFBCTS.

The object of the Nuional Social Socurity Fud (Amcndmcnt) Bill, 2021 is to address the gaps that have been identified in the current law.

Bill No.
19 Natiotul bcial &cwity Furd (Anendrrant) Biil 2O2l The Bill 0rercforc seeks to amend the National Socad Socudty Fund Act,Cap.222- (a) to provide for the appointment ofa stakeholder board by the Minister comprised of represenlatives of Govemmcnt, ernployers and employees; (b) to transfer the regulation and management of the National Social Security Fund to the Minisrer responsible for finance; (c) to expand social security coverage by providing for mandatory contribution by all workers, rcgardless of the size of the enteprise or number of employees and dso allowing voluntary conributions ro the fund; (d) !o empowEr the Fund lo rEcover ft,om a thid pofty any sum owed to a defaulting contributing employcr to cover any conlribution.
penalg or interest; (e) to provide for midtcrm access lo voluntary contribulions and to members who are forty five years and above and have contributed to the fund for at lea$ l0 years; (f) to provide for the defercnce oflaxes on contributions and scheme income lo the time of poyment of bcnefits; (g) to provide for the appointment of the Managing Director and Deputy Managing Director by the Minister on the recommendation of the board for a term of 6ve years renewable on satisfactory performance; (h) to provide for the appoinunent of the Secretary to thc board on a 6ve year contmct rerrcwable on satisfactory performancc; Blll No.
19 Natiorlrll fuiol Sec-urity Futd (Anend,rant) Bill 2021 6) to empower the Minister lo pescribc by ststulory insmment a threshold of expenditure by the Fund prior to approval of the annual budget; (k) !o empower thc board to usc in-house expcrlase snd fud managers in thc investnrcnt of schernc furds including lending to Govcmment; () !o empowa the board !o intrcduc€ new bcmfits in consultation wilh the Minister: (m) to provide for payment of an annrol lcvy by the Fud to the Uganda Retirement Benefic Regulatory Authority; rnd (n) to enhance 6nes in the Act.
HON.

AMONCI BETTY ONCOM, Minister of Gen&t labour and bciol fuvelopment.

Bilt No.

19 Notioml fuial &cutity Futd (Amendneu) Bill n2l THE NATIONAL SocIAL SECURITY FUND (AMENDMENT) BILL,2O2I ARRANGEMENT OF CLAUSES Clause l. Commencement.

2.

Amendment of scctioo I of the Natiooal Social Security Fund Act.

3.

Amendmeat of soction 3 of prrncipalAct.

4.

Amendmenl of sectioo 7 of Fincip.l Acl.

5.

Amendmcnt of section 9 ofprincipel Act.

6.

Repeal of section l0 ofprincipal Act.


7. lnsenioo of section l3A in principol Act.

t. Amendmcnt of section l4 of principal Act.

9.

Amendmcnt of sectioo 19 ofpeincipol Act.

t0.

Amendmcnt of sectioo 2 I of principal Act.

ll.

Amendmcat of section 23 ofprincipsl Acl.

12. lnsertion ofsectioo 24A in peincipol Act.

13.

Subslitution of section 30 ofprincipal Act.. 14.

Amendmcnt of section 39 of peincipal Act.

15.

Substiution of scctioo 40 of principol Act.

16.


Amendment of scction 4 I of peincipol Act.

I Bill No.

19 Nattonol fucial &cr,trity Furul (Anerflneil) Biil 2021 17.

Arneodmcnt of section 43 of princapll Act.

I 8.

Amcndmcnt of serrioo 44 of Fincipol Act 19.

Amendment of scctioo 45 of peincipal Act.

20.

Amendmenl of sccraoo 4t of p.incapd Acr.

2 I .

ln$rtion of scction 54 in principol Act.

22. lnscnion ofThird Schcdulc in principol Act- SCIIEI'ULE THIRD SCHEDULE CURRENCY FOINT 2 Bill No.
19 Natioml $cial &curity Futtd (Anetdnerx) Bill 2021 ) A Bilt for an Act F.NTITLED THE NATIONAL SOCIAL SECURITY FUND (AMENDMENT)ACT,2o2r Ar Aca to rneod the Nrtionll Socirl Security Furd Acl' Crp.

222; ao ertrblirb r strkcholdcr boerd; to provilc for mudtlotT cootribulioor by rll ror*cln, rcgerdlco oftbe rizc ofthe crterpr&.
or oumber of erployccs; to ptuvldc for voluotrrT conlributi,ors to the fuod; to empower the fuod to nrcovcr fiuo e third porty rny sum owed to a dcfrulting contribrtiry cnphycr ao covcr.ry cootributioo, penrlty or intcrerl; to providc for midacrm rcccro lo nembcr'l cootribulioor; to pnovidc for r ffve ye.r lctt of oftcc for thc mroeging dirtctor rod depuly m.DrgiDS dircGlori to cmpowcr thc Boerd to ucc in-boure erpettalc md fuld mrnrgcrr in ahc irvclamcotr of rcheoe fundr; to cmpowci thc borrd to intmdrcc lcw bcocfiar in coosultetlon wilh tbc Milbtcr; tnd for rclraed rttlcn.
BE tT ENACTED by Parliament as follows: l. Coomemcmeol.

This Act shal!

come into force upon publication in the Gazene, except for section 24A which shall come into force on a dat€ to b€ appointed by the Minister by statulory instrunent on the advice of the Board.

3 Bill No.

19 Nonorul fuial &ctrity Furrd (Anetdnent) Bill 2U2l 2.

Aocnducnt of rcctior I olllc Nrlioorl Socbl Socrlly Fud Act.
The National Social Socurity Fund AcL in this Act referrcd to as the principel Act is amended in scction l- (a) by subsituting forparagraph (f), the following- *(0 "conributing employer" rncans an cmployer rcgistered under soction 7;": (b) by substituting for poragnph (g), the following- "G) *contribution" includes $andard contribution, voluntary contribution and spocial contributkro;"; (c) by fol inserring immediately after poragraph (g) the lowing- '{96)'cunency point'has the value assigned lo it in lhe Third Schedute to this Act;"; (d) by substituting for paragraph (k), the following- *(k)'employer"inchdes- (i) the Govemment; (iD a company registered or incorporated under the Companics Ac\20l2i (iii) a partrrship registercd under the Partnership Act,2010; (iv) a trustce incorporatcd undcr thc Trusees I ncorporation Act: 4 _l Bitl No.
19 National *r,ial &cutity Futd (Anerrdned) Bill 2O2l (v) a business rcgisarcd under any other law for the time being in force govcming tlrc establishment of business entities; (vi) ttrc goveming body of an unincotporated association; and (vii) a manager or a subcontractor who provides employees for the principal contraclor; bul whcre a person enters inlo a contract by which some other person is to provide employees for any lawful purpose of the manager and it is not clear from the conlracl which of the two persons is thc cmploycr.
the mamger shall be deemed, for the purposes of this Act, to bc the employert"; and (e) by substituting for paragraph (u).

the following- "(u) "Minister" means the Minisrcr responsible for 6nancel".

3.

Aocndmcnt of lcctaotr 3 of priociprl Acl.

The principal Act is amended by substituting for section 3 the following- "3.

Borrd of Direetorr.
Borrd of Direetorr.

The fund shall be governcd by a stakeholder board of directors appointed by the Minister and consisting of- (a) a chairpercon; (b) the penornent scrrctary of tlre ministry responsible for labour; (c) the permanent secr€lary of the ministry rcsponsible for 6nance; 5 Blll No.
19 Natiorul hcial Scariy Futd Qlnendneu) Bill 2021 (d) four rcpresenmivcs of employees nominated by the Federations of Labour Unionsl (e) two repr€scntatives of employers nominatod by the Federation of Uganda Employerc: and (f) the mansging director who shall bc an ex-ofrcio member with the righr to vote.

<21 A membcr of the board, except those staled uder sub, section (l) (b), (c) ad (f) shall hold office for a term offive years and ruy bc reappointed for one more term only.
(3) A menrber of the board may be removed fronr office by the Minister for- (a) abuse of office; (b) corruption; (c) incompetence; (d) physical or mental incapacity that ren&rs him or her incapoble of pcforming thc functiom of his or her office; (e) misbehaviour or miscorducl; (0 beingadjudged banlrup by a counoflaw; and (g) conviction for an offence involving dishonesty, fuud or moral tu4itde.
(4) A member of the board may rcsign from tlr€ boord by giving notice of not less than one month in writing addressed to the Mioistcr.

(5) Tlre members of the board $all hold offrcc on terms and conditions spccifed in their inslrumenb of appointment.

6 Bill No.
6 Bill No.

19 Naioml fuial &curity Furrd (Anerrhncn ) Bil m2l (6) (a) (b) (c) Tlp Minister shall ensurc that- a nrembcr of thc board is a pcrson of high moral characlcr and proven integrity; thcrc is a bolance of gendcr, skills and expcricmc among the member of thc bood; md thc mcmbcrs of thc bood providcd for u&r subeocrion ( I ) (c), ore cootributing cmy'oycrs undcr scction 7."

4.

Amcrdrncrt of rcctior 7 ofprloclp.l Acl.


The principal Act is amcnded in sccrim 7- (a) by snbstituting for subecction (t), the following- '{ I ) Every eligible ernployec shall rcgistcr as a membor of the fuid and shall mate regub cootributiom to fi€ fund in rcordance with this Act and rcgulatiom madc un&r this Act.
"; (b) by subetituting for subsoctioo (2), thc following- '(2) Every employer, incspective of thc nrnrbcr of cmployccs, shall rcgistcr wilh lhe fund os a contributing employcr and shall mate rcgular contributiom for his or her crnployces in rcordonoe with this Act ard rcgularions ma& under this Act.
": (c) (d) by repealing subsection (3); in subsoction (5) by rcpealing the words "of a class or &scripion specifed io an order made urder subsocrion (l);" ettd (e) in subscction (7) by rcpcaling the wordg 'bf a class or dcscripion spocified io an ordcl made under subsoclion (l)".

7 ?

I BMo 19 Natiord fuiol Sccutity Futd (Anendtent) Bill 2021 5.

Arcrdrcol of rcction 9 ef principel Acl.

Soction 9 of the prircipal Act is amended by Epealing paraenph (b).

6.

Rcpal of rcctior I 0 of priocipr!

Act.


The principal Act is amended by repealing section 10.

1.

Iorcrtion of rcction l3Ain priociprl Act.

Tlre principel Act is amerded by inserting immediately after section l3 the following new section- 'l3A Vohntery corlributions.

(l) A member may make voluntary conlributions to the fund over and above their standard contributions.
(21 A member who wishes to make a volunlary contribulion under subsection (l) may authorise his or her employer in writing to deduct an agreed rate fiom the employee's wage payment and remit the voluntary contribution to the fund.

(3) An employer authorised by an employee under subsection (2), shdl, for every rnonth.

during which he or she p6ys wages for the membcr, pay to the fund.
within fifreen days next following the last day of the month for which the relevant wages arc paid, the volunlary contribution of the sum agreed.

(4) A pcrson who is self<mployed may apply for nrmbership of the fund and shall nuke voluntary consibutions tothe furd.

(5) Nolwithstanding subsoction (l) and (4), any othcr person nuy apply for membcrship and make voluntary contribulinn to the fund.
(6) An employer who deducts a voluntary contrabution under subsectim (2) and fails to remit the contribution to thc 8 I la Bill No.

19 Nottorol fuiol Sec'rrity Fund (Anednentl Diil m2l fund commits an offencc and is liable, on conviction, lo a tlrc not excoeding ooc thousand cufi€ncy points or imprisonment not exc€cding thrce years or both.

(7) The boad slull, by rcgulations, prcscribc lhc pocedure for making voluntary contributions and bercfits."

t. Ancrdocol of rocd,ol l,l olprbciD.l Acr.


Section 14 of the principal Act is amndod by inscrring thc following new subcection immcdiately aller subsocrion (2!- *(3) fury arnount of any cootributbn ud any othcr srm together with intcrcs or pemlty or the conlribution or ury olhcr sum due undcr this Act may be rccovercd ft,om a third pcrty who ow€s mrxrey to a defauhing conlrihting employcr.- 9.
Ancrdocrl of rccfloo t9 ol pttclp.l Act Soction 19 of lhe pimipol Act is amendod by imcrting immcdiatcly affer subaection (l), thc following mw subcoctior- *(la) The board moy, in conrultation with the Miniscr, by strtrxory instrument, prcacdbc additiooal bcoefits."

10.

Anerdocrlofreihr 2l of prhdpdAcl.


Scctioo 2l of the prircipl Act is smended by subctiluling for subsectioo (2), thc following- "(2) Subject to sec'tion 19, a person who ceases to bc a member of the firnd by virtue of bcing employed in cxccpcd employmcnt shall.

if conuibutioos udcr this Act have bocn poid into the fund in respoct of that member, bc entitled to the full bolancc of his or her accounl in the fud.'

I l. Ancoduclt ol cction 2il of principol Aa.
Scction 23 of th€ princapal Act is arncnded by substiruing for subscction (l), thc following- g , I Bitl No ll Natiorrol fuiol &curity Futd (Anetdnent) Bill 2O2l \l) Subjecl to seclion 19. a member of the fund who emigrates permanently fmm Uganda !o I country with wNch no rcciprocal arrangement under this Act has been made, wherc contributions under this Act have bcen paid in rcspect of that member to the fund, the member shall be entitled to the full balance of his or her account in the fund."
12. loscrllon of rcction 24Ain principrl Act The principal Act is amended by inserting the following section immediately after section 24- '24A.

Midte;o ecccsr to bcrc0tr.

(l ) A member who has made voluntary contributions to the fund shall be atlowed midterm acccss to his or her bene6ts rcrued from the voluntary saving on srch terms and conditions and in a manner prescribed by the board.
(2) A member who is forty-fve years of age and above and who has made conributions to lhe fund under section 7 for at least ten years, is eligible to mid-term acc€ss to his or her bene6ts, ofa sum not excceding 20 per cent of his or her accrued beneEts.

(3) The minister shall, in consultation with lhe board, prcscdbe by statutory instrumcnt the terms and conditions and for accesing the rcrued benefrts under this section."

Focedu€ 13.

Snbctitutiol ef rcctloo 30 ef prlociprl Act.


Thc pdncipol Act is amended in section 30 by inserring immediately after subsection (l ), the following- "(2) Notwift$andirry the prcvisions of any other !aw.

ilte board nray use in-house expertise or fund managers in the invcstsnents m&r subacction (l )."

t0 I a Blll No 19 Ndioml fuiol Security Fud (Anendnent) Bil mzl 14.
Aocodnclt ofuccllol !9 of prirclpl AcL Section 39 (l) of th€ prirrcipsl Act is amended- (a) by subaituting for subsection (l) the following- "( I ) Therc shall bc a managing dircctor of thc furd appointed by the Ministcr, on thc recomrncndation of the boord.
"; and (b) by inscrring immediately aftcr subsection ( I ), thc following subsection- *(la) Thc mamging dircclor appointcd un&r sub*ction (l) slull servc for a pcriod offive ycars and may be rcappointed, subjccr b satisfrclory pcrformncc, for onc morE tefm only."

15.

Subclilrtior ofuccllon to ol prhclpol Act The pincipol Ad b amcrded by subctilutirry for scctbn ,() thc following- 'tll).
Dcprtyou4i4dlrccron ( I ) Thcrc shall be a &"puty managitB dircctor of thc fud appointed by thc Minisler on thc rccommadation of thc boord.

(2) Thc deputy mrnrying dircctor appointed utrdct subsoction (t) shall scwc for a paiod of6ve years and mry bc rcappointc4 subicct to satisfrctory performancc, for oc more term only."

I 6.
I 6.

Aocrdocal ol tcclion { I of prlocipel Act Scction 4l of lhe principal Acl is anrndc&- (a) by stbstituting for subcoction (l) thc following- *(l) Tlrc fund shall have a socrclary who shall bc appointcd by tlrc bo6rd, for a tcrm of 6ve yearc and may ll Blll No.

19 Natioml &.riol *crrity Futd (Anednpni Bill 2O2l be reappointed subject to satisfactory performance and on such terms and conditions as are spocified in the instrumcnt ofappointnent.
"; (b) in subsection (2), by deleting the words 'the Minister and".

17.

Amcndoeot of seclioo f3 of primlpel Act.

Section 43 of the principal Act is amended in subsection (4) by substiluting for the words 'ten thousand shillings or to a term of imprisonment not exceeding six months or lo both such fine and imprisonment", the words "6ve hundred culr€rrcy points or imprisonment not exceeding one year or both."
f& Ameodmeot ol rcctioo .l4 of prioclpd Act Section 44 of the principel Acr is amended in subsection (l) by substituting for the words'ten thousand shillings or to a term of imprisonment not exding six rnonths or to both", the words "five hundred cunency points or imprisonment not exceeding one year or bolh."

19.
19.

Aoeodmcol el rcctloo ,15 of priociprl AcL Section 45 of the principal Act is amended by subsrituting for the words "ten thousand shillings or imprisonment not exceeding six months or to both such fine and imprisonment", the wolds "five hundred cunency points or impriso mnt not cxceeding orr year or both."

20.
20.

Arcodmcol of rcclioo ,lt of priDcaprl AcL Section 4t of the pdrcipal Act is arnended by inserting immediately after subsection (2) the following- '(3) Any amounl of contribution and any other sum togelher with interes and any penalty on the contribution or any olher sum or inler€sil may bc rccovercd from a third party who oures money to a contributing employer who has defaulted in making contibutiom.'

t2 Bill No.
t2 Bill No.

19 Noriorul Sctal Secwtty Futtd (A,rarrdncil) Bill 2O2l 21. lorcrlloa of rcction 3l io prlocipl Act The principal Act is emended by inserring immcdiatcly aftcr scction 53 lhe following section- '5{.

AocndrcoaofThird Sclcdulc.

Thc Minister may, by strturory insmmcnt, wilh Cabirrt, amend the Thid Schedule to thisAct."
the approval of 22. lrrcrlloo ofTbfud Sclcdrh ir priDcip.l Act Thc principol Act is amended by insertirg immcdiately afrcr thc Second Schedule the followiog Schcdulc- ..THTRID SCHDDULD CT,,RRD,NCY FOII{T Sectiots I od 51.

A curcocy point is cquivalc to nrcmy 6ousand shillings.'

l3 Ilill No 19 Noriorul fucial *cutity l'und (Anendnen| Biil 2021 Cros Re]ctroccr CompaniesAct 2012,Act I of20t2.

PartncrshipAct, 2010, Act 2 of20l0.

Trustees lncorporation Act, Cap.


165. t{ n{t RtFu9uc of ut^]{o^ CERTIFICATE OF FINANCHL IMPLICATIONS (Made under 3.76 of the Public Finance and Management Act, 20l5) THIS lS TO CERTIE"Y that .the National Social Security Fund (Amendment) Bill, 2O2l under Section 76 of the Public Finance and Management Act, 2Ol5 has been reviewed.

I wish to report as follows: a) Pollcy, Hnclplcs end ObJectiveg of the Bill arc to ad&csc the followlng key aspects: al u. lll.

lv.

v vl.

vn.
To transfer the supervision of the National Social Security F\rnd (NSSF) to the Minister responsible for Finance; To provide for mid-term access for those who are 45 years and above, and have made regular contributions for at least 10 years; To expand social security coverage by providing mandatory contributions by all workers; To provide for access to voluntary contributions, annual levy by the Fund, deference of taxes on contributions and scheme income to the time of payment of benefits; To empower the Minister to determine the expenditure threshold for the Fund; and To empower the Board to introduce new benelits and use in- house expertise and Fund Managers in the investment of schemes.
To provide for the appointment of stakeholders' Board, Managing Director, Deputy Managing Director and Secretary to tt h, &hNw,td , ti hrt\l uul \trronuhle rconomu gmr th,tal ,l.td'ryaot ' lll$ion the Board; b) Plaaned Erpcndtture over the UTEF pcrlod: The funding required for the implementation of the proposed National Social Security Fund (Amendment) Bill, 2O2L will be provided for each year in the budget for National Social Security Fund.
c) Fuading and Budgctary lmpllcations: The implementation of the National Social Security Fund (Amendment) Bill, 202 I will be met from the annual budgets of the Fund.

df Expected Economlc galn to Government: i.

The Bill will enhance the workers'benefits, expand social securit5r coverage by including workers from the informal sector to make voluntary contributions and improve the management of the Fund.

ii.
ii.

The operationalization of the Bill will contribute to increased national savings, household incomes, increase the level of investment by Government and economic wellbeing of the workers in the country.

Submitted to Parliament under my hand this 2021. day of .I:".

(l -f t rv.

hr.r ,\ r'r"i"kki"ita (M.P) \(uyl$sn or Frxfi{cE, pr,Ar{nrrc AND Ecorourc DEVELopMENT Recelved by: Datc: os to ochrcv ttr" mott ,utr l anl .uy,ao,.

]hk tt.trm,/urc g,nh n.ul L\,:h"ncnt t ttson