Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1694435718352.pdf (Uganda)
THE PARLIAMENT OF UGANDA Parliament House, P. O.

Box 7178,Ikmpala, Uganda.

Telephone: Ml4-37 7000,1377 1801377 l8l 137 7 182 Facsimile: Ml+342364 Plot Nos.

16 - 18 Parliament Avenue.

ln my corespooderrce m dia subject please quotc No.

Septembet 22r 2O2O The Rt.

Hon.

Speaker of Parliament, Speaker's Chambers.

Dear Rt.

Hon.
Dear Rt.

Hon.

Speaker, Rt: HARMONISATION OF CLAUSES OF THE NATIONAL SOCIAL SECURITY FUND AMENDMENT BILL, 2OL9 THAT WERE STOOD OVER Please refer to the 32na Sitting of the lst Meeting of the 5m session of the 10u, Parliament at which some clauses of the National Social Security Fund Amendment Bill, 2019 were stood over at Committee stage.

You subsequently directed our Committee to harmonize the contentious issues contained in those provisions and report back to the House on Wednesday 23rd, September,2O2O.
This is to notiff you that the committee carried out this assignment and is ready to report to the House as per your directive.

Please find attached the harmonized position taking care of the interest of the minority report and contributions and concerns raised by several members on the matter.

Once again, accept the assurance of my highest consideration.
Ndeezi Alex (MP) CHATRPERSON, COMMITTEE ON GENDER, LABOUR AND SOCIAL DEVELOPMENT Cc: All Members of Parliament Cc: Clerk to Parliament HARUOIIISATION OF CLAUSES OF THE NATIONAL SOCIAL SECT'RITY FT'ND THE WIIOLE HOUSE ON TTIURSDAY SEPTEMBER 17'H, 2O2O Madam Chairperson and Hon Members, Ttre House stood over clauses 10, t2, t3, 14, 15, t6, t7 and 18 of the bill.
After reconsideration and harmonization with the proposals contained in the minority report and the various submissions of Members on the floor, the Committee would like to submit as follows: 1.

CLIIUSE 1O: INSERTIOII OF SECTION 24ATO PRINCIPAL ACT Replace clause 10 to read as follows- (24A.

Mldterm Access to beneflts.


(1) A member who has made voluntary contributions to the fund shall be allowed midterm access to his or her benefits accrued from the voluntary saving on such terms and conditions and in a manner prescribed by the Board.

(2) A member who is in employment and is forty five years and above or has contributed to the fund for at least ten years, is eligible to mid-term access of a sum not exceeding 2Oo/o of.

his or her accrued benefits.


(3) A member who is a person with disability who ceases to be employed for a period of not less than one year may withdraw 75o/o of his or her accrued benefits.

(4)A member who is forty five years and above and ceases to be employed for a period of not less than three years is eligible to mid-term access of a sum not exceeding 4Oo/o of his or her accmed benefits.
(5) The Minister shall, in consultation with the Board, prescribe by Statutory Instrument the terms and conditions and procedure for accessing accrued benefits under this section."

1 Justlflcatlon a) The principle of midterm access is necessary to cater for unexpected challenges in the life of a member who may need to utilize some of his or her savings as bail out in case unemployment, illness etc.
b) Subsection (1) allows voluntary savers to withdraw their accrued benefits from the voluntary saving, subject to terms and conditions set by the Board.

c) Subsection (2) is to cater for members who have saved for a long time or who are above a certain age to access part of their benefit for investment or other related purpose as a way of preparing for their retirement.
d) Sub section (3) is to cater for PWD's who according to the latest Housing and Population census, PWDs constitute L2o/o of the population of Uganda (about 5 Million people) and less than 2% of the PWDs in Uganda are in formal employment.
Research carried out by the National Union of Disabled Persons of Uganda (NUDIPU) indicate that due to the negative attittrde towards PWDs in the working environment, almost 90% of PWDS who lose jobs are never employed again and survive by way of self-employment in the informal sector, Therefore PWDs deserve to be given their money/ savings to survive on their own.
e) Subsection (4) is to enable members who are in advanced age and lose emploSrment, but remain unemployed for three years or more to receive part of their benefits as a relief to be able to attain the basic necessities of life.

This is because it is usually very difficult for a person advance in age to be employable.

0 Subsection (5) is to provide for the Minister to regulate the procedure of allowing mid-term access in order to maintain the principal objective and viability of Retirement funds.

2.
2.

CT.AUSE 12 12 (Al This clause relates to responsibility for investment decisions which is being moved from the Ministry of Gender Labour and Social Development to the Ministry of finance, Planning and Economic Development as proposed by both the president and the Ministry of Finance.

2 The Commlttee has no obJection to the provlslon as contained in the blll.

Therefore, we have no amendment to 12(af.


12(Bl In Clause 12 (b), the Committee already submitted a proposed amendment to read as follows: 12(b) is amended by deleting the phrase "Which may include lending to the Government" Justilication a) In practice, the NSSF already lends to Government through Government securities, treasur5r bills and bonds or other instruments sold on the open market.
b) Lending through the open market ensures that members'funds are protected from transactions below market interest rates and high costs of lending.

c) To ensure that the financial market is not distorted since NSSF is a key player in Uganda's financial market.

d) The investment decisions of the NSSF will move to the Ministry of Finance, Planning and Economic Development.

Should the ministry be given a blanket check to lend to itself without market safeguards, it would create conflict of interests.

3.
3.

CLIIUSES 13, 14, 15, 16, 17 and 18 After further consideration, the Committee concluded that the provisions in Clauses 13, 14, 15, 16, 17 and 18 of the Bill remains as presented by the Minister.

These provisions largely deal with institutional framework for the superuision and overall direction of the fund and its critical financial and investment decisions.

The committee believes that its position provides a good balance with respect to the interests of the Ministries and stakeholders concerned.
Specifically, the Committee strongly believes that the joint and complementary work by the different ministries will: a) Take care of the concerns expressed by the Ministry of Finance and His Excellence the President of Uganda with respect to involvement of the Ministry 3 of Finance, Planning and Economic Development, in monitoring the investment portfolios of the fund, including the power to borrow, management of accounts, audit and declaration of interests and management of reserve account.
b) That the NSSF Act was made under the auspices of the International Labour Organization, the conventions of which, Uganda is a signatory.

These conventions are under the mandate of the Ministry of Gender, tabor and Social Development, requiring the Ministry to play its cardinal role in monitoring and reporting on our compliance to international commitments and obligations.
c) F\rrther, the Uganda Retirement Benefits Regulatory Authority (URBRA) is an institutional framework that regulates and monitors the perforrnance of all institutions and organizations handling social security benefits for retirees in Uganda.

URBRA is housed under the Ministry of Finance, Planning and Economic Developmentwhich appoints and supervises its board.

Ttrerefore, the Ministry of Finance already has supervisory roles on linancial matters through URBRA.
d) Ttre Committee made reference to the law governing the Public sector pension scheme and noted that the responsible minster is the minister of hrblic service with finance ministry supenrising the financial aspects of the scheme only.

The NSSF should therefore not be an exception.


e) That allover East Africa, Ghana and other countries that it is best practice for the Social Security function to be under the mandate of the ministry responsible for labour and social developmentwhile finance Ministry supervises the Iinancial aspects.

Madam Chalrperson and Hon Members, I beg to submlt.

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