Workers, government disagree on future of the pension sector

NSSF chairman Ivan Kyayonka (2nd R) chats with Mr Elly Karuhanga (R), Tullow General Manager Jimmy Mugerwa (L) and Ms Olive Lumonya , the NSSF head of Marketing and Communication, at the general meeting in Kampala yesterday. PHOTO BY Faiswal Kasirye 

By ISMAIL MUSA LADU

Posted  Wednesday, March 20  2013 at  02:00

In Summary

The meeting was aimed at promoting transparency and accountability at the Fund.

Breaking away from the earlier tradition, the country’s main social security provider, NSSF, has for the first time in the history of the Fund held a general meeting.

In the meeting, the Fund did not only declare its achievements and future plans, but also subjected itself to criticism from its members.

Although there was a general agreement that the initiative should become an annual event for transparency and accountability reasons, industry players, particularly government and workers unions, could not agree on the future of the (pension) sector.

Workers’ view

According to the workers’ representatives, the Liberalisation Bill in Parliament stands to disintegrate the workers and it is on that ground that it should be opposed.

The Bill seeks to regulate the pension sector and open it up for other players providing social security services.

“The National Social Security Fund (NSSF) should be protected from interests that want to tear it apart,” the acting Secretary General of the Central Organisation of Free Trade Unions, Mr Robert Wanjusi, said yesterday.

He added: “We have conflict with the Ministry of Finance who are not accommodating our interest quite well.”

According to Mr Wanjusi, the liberalisation Bill in its current shape, can easily be manipulated by the employers at the expense of workers, a claim the employers deny.

He argued that the government ploy to give workers their money in bits as stipulated in the proposed law only serves to perpetuate poverty.

And the fact that the proposed law will permit workers to move to schemes of their choice, will only help to weaken the united bargaining power of workers as they would be acting independently.

But according to the National Organisation of Trade Unions, chairman-general, Mr Usher Wilson Owere, the other contention originates from the way the regulatory body - the Uganda Retirements Benefits Regulatory Authority - was formed.

Mr Owere claimed in an interview that most of the members in the regulatory body were the same ones, who drafted the proposed liberalisation Bill with the view to selfishly benefit from it.

No way
The position has, however, been denied by the government, saying there is no way the regulators can make laws that they are going to oversee themselves.

“This law will help the pension industry managed better,” Mr Aston Kajara, the state minister for privatisation, who represented the Minister of Finance, Ms Maria Kiwanuka, said.

He added: The proposed law will oversee smooth transition of NSSF and its ultimate prize will be competition something that is good for the sector.”

The Funds Managing Director, who said the institution has excess of Shs3 trillion, a compliance rate of over 70 per cent and a monthly income of nearly Shs100billion, said he is not afraid of liberalisation.

He said: “We are ready for anything. In fact we can’t wait for the new law to come in.”

Meanwhile, NSSF has once again avoided queries that could soil its books of accounts. The Auditor-General has issued the Fund unqualified opinion, meaning the institution’s financial statements for the year ended June 30, 2012 presents a fair and accurate picture of the Fund and comply with generally accepted accounting principles.