The National Social Security Fund-NSSF has asked parliament to split the current Fund into two to provide for workers who would want to have midterm access to their savings.
Speaking to reporters at the NSSF head offices in Kampala on Thursday, Richard Byarugaba, the Fund’s managing director said one fund will be for those savers who want to access their money after retirement and the second would be for those who want to have midterm access to their funding.
On Wednesday, President Museveni indicated that he is willing to assent to a bill that allows savers with NSSF who have either saved for 10 years or are 45 years to access 20 percent of their money.
Currently, the NSSF Act only allows savers to access their money when they have retired, have reached 55 years of age, have got a permanent injury, have lost a job for some time or have died whereby the survivors claim the benefits.
After President Museveni indicating that he was willing to assent to the bill, it will now go back to parliament for further processing into a final bill. It is at this stage that Byarugaba wants these changes to be incorporated.
In their estimation, there are about 100,000 people out of the close to 2million savers who are currently eligible for midterm access. Byarugaba said, if all these people are to apply for midterm access, the fund will have to give out at least 1Trillion Shillings on top of the 900 Billion Shillings they give out annually through other benefits.
Byarugaba says if all those who are eligible apply for access, there might be a run on the fund unless the payments are staggered.
Byarugaba said even when he welcomes the amendments he still appeals to savers not to withdraw their money until when they retire.
“If you are on a salary of UGX 500,000 for 25 years of your saving period and NSSF gave 10 percent to you in interest, by the end of your saving period you will have in your account UGX 150 Million. However, if you choose to withdraw 20 percent, when you are 45, you will withdraw 7 Million Shillings but the money you miss out on is 23 million. But I’m pleased with these amendments because they make us do more for our members,” Byarugaba said.
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