Report: 43% of Companies Not NSSF Subscribers

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In short
A survey conducted by Uganda Retirement Benefit Regulatory Authority URBRA and Uganda Bureau of Statistics UBOS has indicated that only 57 percent of the companies assessed are registered with National Social Security Fund NSSF while 43 percent are not registered.

A survey conducted by Uganda Retirement Benefit Regulatory Authority (URBRA) and Uganda Bureau of Statistics (UBOS) has indicated that only 57 percent of the companies assessed are registered with National Social Security Fund (NSSF) while 43 percent are not registered.
 
The Employment Benefits Baseline Survey Report, 2016 covers a total of 2,933 companies employing 106,403 workers who were interviewed. The companies surveyed are located in nine districts which include Gulu, Mukono, Jinja, Wakiso, Mbarara, Masaka, Mbale, Soroti and Kampala.
 
Eighty one percent of the companies are in the private sector, 10 percent are non-governmental organisations while nine percent are government ministries, department and agencies. 

The survey carried out between June and August 2016 aimed at finding out employment based retirement plans and other employee related benefits provided by employers in Uganda.
 
Peter Opio, director business and industry statistics at UBOS who presented key findings of the report at the Statistics Bureau today said of the 2,933 companies surveyed, 2,666 employ five people and above.
 
Opio noted that of the 2,666 establishments with five employees and above, 58.8% were registered with NSSF. Of the 267 establishments that had less than five employees, 34 percent were registered with NSSF.
 
The report findings triggered questions in regard to liberalisation of the pension sector in Uganda. NSSF is the only national savings scheme as per NSSF Act, 1985.
 
However, the Retirement Benefits Sector Liberalisation bill, 2011 that seeks to repeal the Pensions Act 2007 and the National Social Security Fund (NSSF) Act and open up the pension sector is being discussed in parliament.
 
If the bill is enacted and assented to by the president, it will bring to an end the 32-year NSSF monopoly by allowing competition among private pension schemes.
 
UBRA CEO David Nyakundi Bonyi argued that liberalisation of pension sector is not a new thing globally. He said in many countries, liberalisation of pension sectors is triggered by inept management of people's savings. 

What is critical, he said, is how the process is handled because there are countries where it has worked or failed. In Uganda, he argued, calls for liberalisation of pension sector was triggered by political interference in the management of NSSF savings.
 
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He said the political interference in NSSF management has vanished even when the law has not changed. Bonyi argued that the only thing that has changed is its top management. He was quick to admit that political interference may resurface.
 
Bonyi said what is critical is putting in place laws that can guarantee good governance of people's saving or liberalise the sector so that it is under constant competition.
 
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He further noted that the mode of giving pension funds to beneficiaries should be changed. Instead of giving out lump-sum money, Bonyi said people should be given money in phases.
 
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Other survey findings
 
The survey also found out that 69 percent of voluntary retirement benefit schemes in assessed companies are not registered with government.
 
The survey indicates that the highest numbers of companies with voluntary retirement benefit schemes are those that have been in existence for 1 to 20 years while those that are 40 years and above have abandoned or are abandoning voluntary retirement schemes.
 
The survey recommends that employees and employers should be sensitised on retirement planning, saving and existence of retirement benefits regulatory sector.
 
Other recommendations are; encouraging and supporting employers to put in place retirement benefit schemes, enforcing of compliance of NSSF as well as review of existing pension legislations.

 

About the author

Blanshe Musinguzi
Musinguzi Blanshe is a politics-cum-business journalist. He joined Uganda Radio Network in February 2017. Previously, he worked at Daily Monitor and Red Pepper Publications Limited. He is keenly interested in data journalism.