NSSF justifies state move to tap into workers’ savings

NSSF MD Byarugaba

National Social Security Fund [NSSF] Managing Director, Richard Byarugaba, is still appearing in media trying to justify a move by government to use workers’ savings without consulting them.

While interfacing with media on Thursday, Byarugaba said the new NSSF Amendment Bill which seeks to allow government borrow savers’ money is actually to their benefit.

The bill also forces the private sector to save with NSSF as a way of increasing coverage of the tax regime to 80% of the population.

Byarugaba said the new bill will look at five things which include; contributions not exceeding 30% of income to be exempt, increase coverage to 80% without pension coverage today and increase accumulation phase of your retirement journey by allowing in -house management of investments.

Victoria University

“It will also increase accumulation phase of individual retirement journey by allowing voluntary top-ups of savings and prepare early for your retirement by allowing innovations around mid -access products like housing & health planning before retirement,” Byarugaba noted.

While explaining the proposed tax regime, Martin Wandera, Director of Labour, Employment and Occupational Safety and Health at the Ministry of Gender, Labour and Social Development states that:

”Three questions are asked when a new bill in the social security sector is proposed; Will it expand coverage? Will it reduce cost and risk? And will it improve efficiency and effectiveness in management?”

He further adds close 7 of the bill allows people in the informal sector, for example, the self-employed to save NSSF which unlocks the opportunity to save with the Fund.

“In order to appreciate the new bill, you need to read it with the NSSF and URBRA Act,” he noted.


On August 13, 2019, Government tabled the national Social Security Fund (NSSF) Amendment Bill, 2019.

In March 2018, the Cabinet, during its sitting chaired by HE President Yoweri Museveni, approved the Proposed Principles to amend the NSSF Act (Cap 222).

The approved principles that underlie the proposed amendments to the Act include; Expanding social security coverage; Enhancing efficiency and effectiveness in investment; Providing for introduction of new benefits Improving Governance; and Streamlining appointment of staff to key positions of the Fund.

In line with the above principles, Cabinet approved a number of proposed amendments to the NSSF Act.

Byarugaba says that a member’s contribution is taxed at deduction of payroll, NSSF income is taxed when earned and the members Benefits are exempted from tax.

Martin Wandera, Director of Labour, Employment and Occupational Safety and Health

“So all member accrued benefits will have been taxed by the time they are paid. Here member contributions will not be taxed, and NSSF income earned will not be taxed.”

“However member Benefits will be taxed at the point of withdrawal. Should a member attain the age of 60 years their Age Benefit will not be taxed.”

He said other benefits that will not attract tax also include the Invalidity and Survivors Benefits.

Under the new tax regime, a member will have more money compared to the current tax regime, Byarugaba argued.

Courts savers

“We are going to carry out financial literacy to sensitise many on why they should save with NSSF for their future,” Byarugaba said Thursday night while appearing on NTV “On the Spot” programme.

He said Government is the best risk in any country.

“That is why it will be possible for them to borrow this money while we try to invest it and multiply your benefits.”

The MD said the reason they are asking people to hang in there for five more years from the usual 55 is that “we believe at that time, their savings will have increased a bit to a figure that should be useful to them in their retirement”.

One of the issues that have always brought issues to the fund is Governance, he noted.

“What this law is now doing is to bring in safeguards like where the board will have three stakeholders namely Government, the employers and the employees.”

He said the law also says the board will have a hand in the appointment of the senior officials of NSSF which is aimed at ensuring that the right people take on the jobs.



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