NSSF earns Shs30 billion from improved compliance

Members of Workers’ Union during a meeting. The recovered money has boosted the fund’s financial muscle. PHOTO BY ABUBAKER LUBOWA 

By  ISMAIL MUSA LADU

In Summary

The new model has pushed the employers’ compliance rate to about 76 per cent, up from below 50 per cent two years ago.

The institution tasked with collecting and managing workers savings, National Social Security Fund, has recouped about Shs30 billion from at least 100 employers who have been evading the mandatory contributions for years.

Explaining how the Shs30 billion was recouped, NSSF managing director Richard Byarugaba said, the fund simply tweaked its business model.

“We replaced the compliance model we had earlier with the relationship model. And what we are witnessing now is the results of that twist,” he said.

However, the workers do not only want that money invested in important areas but also hope to benefit from its returns.

“We want investment in projects like housing and medical insurance. These are things that are close to our hearts. And we also expect nothing less than an impressive return on investment,” said the chairman of the National Organisation of Trade Unions, Mr Wilson Owere, in a mid-week interview with the Daily Monitor.

In support of the investment choices the Fund’s undertake, including the Fund’s recent investment in Umeme shares, Mr Byarugaba, said these are arrived at after thorough investigations by several teams of experts.

He further noted that although the Fund is willing to invest prudently, there are limited areas in Uganda where the fund can invest in.

“We are always looking forward to invest but we do not have many options (besides investment in real estate, Treasury Bills and bonds and company shares),” Mr Byarugaba told journalists on Wednesday.

The compliance model previously used was based on enforcement (punishment) while the current relationship model is about encouraging employers to comply.

This has not only boosted the Fund’s financial muscle but also pushed employers’ compliance rate to about 76 per cent, up from below 50 per cent, two years ago.