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NSSF in the spotlight over UGX19 billion ‘illegal’ payments to URBRA

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NSSF in the spotlight over UGX19 billion ‘illegal’ payments to URBRA

L-R Stephen Mwanje, the head of of operations, Richard Byarugaba, the MD and Barbra Arimi, the head of marketing and communications at NSSF

L-R Stephen Mwanje, the head of of operations, Richard Byarugaba, the MD and Barbra Arimi, the head of marketing and communications at NSSF


Contributors to the National Social Security Fund (NSSF) have lost up to UGX19 billion in the past 3 years alone in ‘illegal’ payments by the Fund to the Uganda Retirement Benefits Regulatory Authority (URBRA), The Sunrise has learnt.

The matter has become a critical part of an ongoing debate surrounding the proposed amendments to the NSSF act that is before Parliament.

One of the proposed provisions is section 38A that provides that NSSF will pay 0.05% of its assets to URBRA. However the fund has been doing this for the past three years, using what campaigners have called a clandestine regulation that was put into the URBRA Act by the Minister of Finance, before consulting Parliament.

URBRA was established in 2012 through an act of Parliament as a regulatory body that supervises all licensed retirement benefit schemes in Uganda.

Human rights defenders say that the UGX19 billion that has been paid out by NSSF, is represents the bulk of the money that has been paid to URBRA. Other licensed retirement schemes also remit millions of shillings to the regulator.

Gideon Tugume, the Executive Director of Human Rights Defenders Association, says that in 2017 the Minister of Finance made a statutory instrument that empowered URBRA to collect 0.05% of the total assets of Retirement Benefit Schemes like NSSF, contrary to what Parliament had legislated.

Workers MP Dr. Sam Lyomoki has told The Sunrise that last year alone, URBRA collected UGX6.5 billion from NSSF. He also described the levy as an abuse of power by the Minister of Finance.

Lyomoki says that although Parliament had, under the URBRA act, given the Minister powers to make regulations to introduce a compulsory levy for all retirement schemes, the Minister abused these powers to irrationally collect too much money beyond the original purpose of the provision – which was simply to support the day-to-day running of the authority.

Now according to Gideon Tugume, who is also a contributing member of NSSF, the plunder of workers’ savings is set to be entrenched in law with the proposal to include the 0.05% compulsory levy into the NSSF act.

“When URBRA and NSSF realized that their scheme of siphoning our money through the illegal statutory instrument may be challenged, they are trying to legalize it by inserting it into the NSSF Amendment bill using section 38A. This new section provides that retirement schemes such NSSF must pay a compulsory levy of 0.05 of their Assets.

“Fellow Ugandan, if URBRA and the Minister had the Authority to levy this compulsory levy under the URBRA, why are they trying to sneak it into the NSSF Amendment Act?” asks Tugume.

Tugume argues that the move is the latest scandal to rock the Fund and is backed by government and NSSF management.

MP Lyomoki says the Parliamentary Committee that was handling the amendment, has agreed to remove the provision that would allow NSSF to compulsorily pay the 0.05% levy.

He says that he plans to introduce a separate private members bill to amend the URBRA act to specifically determine how much money the authority can collect from benefit schemes.

But Tugume says that basing on the history of the management of NSSF, government could influence MPs to pass the provisions (including section 38A) that are not in favour of savers.

Asked why he and those who share his grievances, don’t take the matter of illegal levies by URBRA, to courts of law, Tugume says matters involving NSSF are highly political and would attract the intervention of politicians to frustrate it.

“NSSF is a cash cow for the ruling NRM party. You can go to court but the same courts are full of NRM cadres, The leaders of NRM will do everything in their power to frustrate you,” says Tugume.

Instead, he has decided to take the matter into the public domain by rallying NSSF members and the general public through social media platforms and mainstream media to put pressure on MPs not to support the proposed section 38A.

NSSF ‘abusing’ savers’ money

Tugume, argues that there are indications that the mismanagement of savers money and disregard of workers’ interests by both politicians and the NSSF management continues to manifest to date.

He says that the claim by NSSF that they cannot afford to give members a percentage of their savings is lame and inaccurate because the same Fund is lending trillions of the same money to Kenyans.

“Where did the NSSF MD get the UGX800 million he donated to COVID-19 task force if he says there is no money. What I can tell you is that the managers are not serving the interests of the members but rather the interests of politicians who put them in office,” says Tugume.

“NSSF and others keep lying to workers that the NSSF Amendment bill provides for midterm access to workers to their savings but they are lying to you. The bill contains midterm access for voluntary contributions but not for mandatory contributions. How many of you have voluntary contributions to NSSF?

A Letter published online by the NSSF MD Richard Byarugaba indicates that the fund strongly supports mid-term access only that the current law does not allow them to extend the much-needed support to their members.

Byarugaba has rallied members to urge their MPs to support the proposed ammendments to the NSSF Act.

Nevertheless, Tugume has rallied Ugandans especially workers to rise up and speak out against the proposed amendment that seeks to legalise the 0.05% compulsory levy.

“Fellow Ugandans, please stand up against theft of our savings. Make noise using every social media platform. Tell whoever can listen that We need sec 38A out of the NSSF Amendment bill. We need the illegal compulsory levy scrapped and money returned to NSSF with interest .That we need midterm access to our savings with NSSF. That we need COVID relief of 30 percent of our savings at NSSF for those that have been adversely affected by the lockdown and need to pay their debts, rebuild their businesses and care for their families.

“NSSF should know that our salaries are too low to pay all our bills and we make ends meet by struggling in our small businesses which have been closed for three months. We have to start afresh after lockdown. NSSF COVID Relief will put us back on our feet, says Tugume.

The Sunrise could not obtain a response from URBRA as their official telephone contacts were out of reach.

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