Review proposals in Pensions Reform Bill, say HR managers

 

A Human Resource Manager raises her hand during a debate by the Association of HR mangers on the Pensions Reform Bill in Kampala last Thursday. Over 50 managers said there are section of the Bill that are unfair to workers. Photo by Steven Ouma 

By Brian Ssenoga

 

Human resource managers under their umbrella organization, the Human Resource Managers Association of Uganda (HRMAU) want government to critically re-examine a raft of proposed changes to the retirement benefit sector liberalization legislation. The managers says some of the provisions are in direct contradiction with the already existing Uganda Retirement and Benefits Act 2011.

According to Patrick Ngolobi, the director HRMAU, the association cannot allow the bill which has sections which gives all powers to the finance minister even to access organisations’ in-house saving schemes to be passed unless such sections are amended.

“The bill is in good spirit but we are unhappy with some specific sections which are not applicable to the stakeholders, for instance, it gives all powers to the minister yet income tax should be handled by the commissioner general of Uganda Revenue authority on top of giving government powers to determine where and when savings will be reinvested” Ngolobi told Jobs and Career on phone this week.

The contentious bill according to Mr Ngolobi if passed in its current form will allow government to give employees only 30 percent of their savings on retirement and the rest to come in monthly payments as determined by the government giving little choice to retired workers to have over money they have saved.

Many critics of this provision say the savings were envisaged to provide a retiring worker after 30 or 20 years of mandatory savings to have accumulated sufficient savings in order for them to have adequate seed capital for personal investment or happy retirement.

Government argues that an end to regular income has led many to destitution once the monthly pay check is no more. The view, its supporters, say is to cushion those with bad financial management habits who would wont to blow the money on luxury after reclaiming it from the Fund.

But others say, a saver should have the right to use their money the best way they feel after years of forced savings. This view, wants government to instead focus on preparing retiring workers on the best way to invest the money rather than hold onto it.

Among the proposed changes will be the liberalisation of the sector which seeks to end the monopoly of the statutory savings fund, National Social Security Fund (NSSF) to provide space for private players in what is seen as a lucrative sector.

The Bill among others provides for more government oversight over in-house saving schemes of individual organisations and companies. This particular proposal has unnerved a number of HR professionals calling for lesser and not more government preferring broader regulations that guide the schemes over all to protect workers but not the sweeping powers that the proposal wants to give to the Minister.

Jobs and Careers understands that some organisations, especially NGO’s have already started winding up their internal schemes to avoid being caught on the wrong side of the new laws.

“We cannot deny government access to this money (in-house savings) because even now it is using it in one way or another but its ability to invest our money should be directed and determined by employees’ lest they lose out after it is invested and mismanaged in other things” said Emmanuel Kasule of orange Uganda at Imperial Royal where the meeting was held yesterday.

When contacted, worker’s MP Charles Bakabulindi said that the bill needs a lot of changes and if passed in its current form it will cause serious consequences including amendments of some laws.

“I am aware of that bill but we cannot pass it and if so then amendments have to be made on other laws. It is not in line with the 2011 act,” said Mr. Bakabulindi on phone.

HR managers have also vowed to petition parliament over the bill and the amendments they want to be done before it is passed into law.