NSSF ON TRIAL: Court Petition Sought to sanction NSSF pay 20% Members Savings

By DailyNewsUG Business Correspondent,
Uganda’s Constitutional Court has given National Social Security Fund (NSSF) and the Attorney General of Government 10 days within which to respond to a petition filed by a Human Rights Activist Morris Rwakakamba.

A human rights activist yesterday petitioned the Constitutional Court in Kampala, seeking its orders to, among others, compel the National Social Security Fund (NSSF) to pay out each of its members atleast 20 per cent of their savings to mitigate the pressures brought about by Covid-19 pandemic.

Mr Morrison Rwakakamba states that the Covid-19 pandemic forced President Museveni to issue various directives that made many NSSF members to close their operations resulting in loss of money .

He further states that President Museveni’s directives have negatively impacted on the livelihoods of the members of NSSF as majority of them can no longer afford a meal for themselves and their families.

“Court should give an order directing the second respondent (NSSF) to pay out at least 20 per cent to each of its members whose lives have been affected by the current Covid-19 pandemic,” reads in part Mr Rwakakamba’s petition.

The petitioner further asks court to issue an order, directing NSSF to, within two months from the date of judgment, foster the amendment of the NSSF Act in a manner that guarantees its members their rights under the 1995 Constitution and other rights under the international instruments ratified by Uganda.

Mr Rwakakamba contends that the efforts by government to distribute food to its citizens have not yielded much since members of NSSF are discriminated against for not being among the vulnerable who deserve the government hand-outs.

“Despite the government under the auspices of the Office of the Prime Minister offering food relief items, these have been inadequate as its distribution is limited to the vulnerable and in only a few areas in the country and is discriminatory against majority of the members of the second respondent (NSSF),” he avers.

The petition against the NSSF and the Attorney General, comes at the time when there are numerous calls to the Fund to pay its members atleast 20 per cent of their savings to cushion themselves against the economic hardships brought about by Covid-19 pandemic.

Likewise, there is an amendment Bill before Parliament that if passed, will among others, see members of the NSSF access their savings mid-term. The MPs are yet to vote on it.

The managing director, Mr Richard Byarugaba, has since warned of the economic damage of paying out atleast 20 per cent to each of its members.

He has warned that if the 20 per cent pay-out is effected, it will mean that the Fund will have to sell its treasury bonds to meet the benefits payments and that this will damage the markets.

The NSSF has also said it has heavily invested in physical infrastructure like the construction of the pension tower, Lubowa housing estate, and Temangalo housing projects.

The Fund will need atleast Shs3 trillion if it is to pay out 20 per cent to each of its members.

By press time yesterday, NSSF and the Attorney General had not yet filed their defence to this petition.

Background
Employers and workers through their associations had earlier asked government to differ collection of Pay As You Earn (PAYE), National Social Security Fund (NSSF) and Value Added Tax (VAT) to enable them go through the lockdown that has seen most businesses temporarily close.

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