Workers, government differ on pension reforms

L-R: Mr Mafabi, Ms Wabudeya and Mr Museveni. Bugisu region has often proven to be the Waterloo of many a political bigwig, with voters emphatically expressing
themselves. FILE P HOTO 

By  Yasiin Mugerwa

Parliament- Members of Parliament are divided on how the proposed pension sector reforms should deal with the National Social Security Fund after the government yesterday presented the planned legislation before the Finance Committee.

While a number of lawmakers admitted that they had not yet “internalised” the Bill brought to the House in 2010, those who had ‘perused’ disagreed on the proposal to give NSSF a transition period of five years before the Fund joins other private players in a liberalised market.

Mr Fred Omach, the Finance state minister in charge of general duties, appeared before the committee yesterday to present the Bill.

He said: “When I first tabled the Bill in the 8th Parliament, workers’ unions wanted my head, but they have since agreed with the government on the relevance of the Bill”.

Dismissed allegations

However, Mr Usher Wilson Owere, the chairman National Organisation of Trade Unions, dismissed the minister’s narrative as ‘a total lie’ and asked the committee to throw out the Bill in public interest.

“We have never agreed with the government on anything, the minister is telling lies to the committee,” Mr Owere said.


“There is a racket in government that wants to dismantle NSSF and steal workers money under the cover of liberalising the pension sector,” he added.
The Bill seeks to open up the pensions sector to other players as well as breaking up NSSF’s monopoly.

According to Mr Owere, about 109 private insurance firms have been lined up to be used as “a conduit to steal workers money.

Mr Owere asked the committee to investigate the Finance minister, Maria Kiwanuka and Moses Bekabye, the acting chief executive officer of the Uganda Retirement Benefits Regulatory Authority whom he accused of having “sinister motive” in pushing through the Bill.

Mr Michael Mawanga (NRM, Igara East), who is leading a group of legislators against the transition period asked why the government was seeking to pamper NSSF yet the Fund had been in existence for decades.

Mr Mawanda and his group are demanding for a leveled playing field that would fully liberalize the pension sector favouring all players involved.

“A “buffer clause” should be put in place to stop private insurance firms from investing workers’ money outside East African region

.

On the centrally a group, led by Mr Amos Lugoloobi (NRM, Ntejeru North) warned the government against full-liberalisation.

“You cannot just open the sector; there are some risks and we have to protect workers money,” Mr Lugoloobi said. “For us to open up the sector 100 per cent without any protection to the NSSF is a risky business, the transition period of five years must be protected if we are to have a good law.”

Key issues in the Bill

Mandatory contribution. The major principle of the Bill provides for mandatory contributions for employees in both formal and informal employment.
Competitiveness. The bill also seeks to create a competitive pension sector thus breaking NSSF’s monopoly.