NSSF lists 300 firms not sending money

 

A section of the Pension Towers currently under construction. Some stakeholders say the Fund is investing in unviable ventures. Photo BY RACHEL MABALA. 

By ISMAIL MUSA LADU

In Summary

Monitor publishes full list of firms to help employers and employees crosscheck and ensure contributions are paid and received.

KAMPALA

Sources in the National Social Security Fund yesterday released a list of more than 200 companies it says have not been remitting monthly contributions on behalf of their employees, despite deducting the money from their salaries. NSSF officials said the unremitted money over the last five years totals to about Shs16.5 billion.

This newspaper could not immediately establish whether the companies named deliberately failed to remit the money or whether they did so but were not acknowledged.

In order to give the named companies and their employees an opportunity to crosscheck their accounts with the Fund, this newspaper is publishing the list of the companies, as provided by NSSF.

Companies with five or more employees are required by law to deduct five per cent of the workers’ salary, top that up with a 10 per cent contribution and remit the 15 per cent to NSSF.

Civil servants, members of the armed forces and companies with in-house matching pension schemes that meet certain criteria are exempt from the NSSF scheme. Companies that fail to register their employees with the scheme or fail to remit deducted money are liable for fines as well as lawsuits by the Fund. The NSSF
Act prescribes a penalty of 10 per cent per month of the default amount and outstanding interest. The Fund may also recover legal and related administrative costs from the defaulting employer.

One of the companies on the list, Dembe FM, was bought by Monitor Publications Ltd last year, which also publishes the Daily Monitor newspaper. MPL MD Alex Asiimwe said yesterday that the default amount was from before the acquisition of the radio station, which is now fully compliant in all its tax and pension obligations.

NSSF Managing Director Richard Byarugaba said the Fund has been running an amnesty for firms to comply with their obligations, as well as encouraging employees to confirm that they are registered and their deductions submitted.

Amnesty
The amnesty has boosted compliance but “pursuing litigation against employers who are unwilling to remit contributions for their employees” is the last resort, Mr Byarugaba said.

NSSF officials say employers collect at least Shs2 billion every year that is not remitted to the fund. An audit of the scheme also shows that most of the defaulting companies have been evading the social security contributions for more than 90-months (seven and half years).

Apart from creating a hole in their pensions, the non-remittance has also cost employees the interest they would have earned in that period. The NSSF is currently running a whistle-blower campaign to encourage aggrieved employees to report employers who do not remit their NSSF contributions. To date, 1,406 employees have reported defaulters.