All formal entities and employers have up to the end of next month to register and start remitting contributions to the National Social Security Fund (NSSF) on behalf of their employees, or risk tougher penalties.
The changes announced by the Fund leadership yesterday aim to effect provisions of the NSSF Amendment Act, 2022, which requires all employees in specified categories to be enrolled for the pension Fund contributions.
Section 7(2) of the amended Act provides that “every employer, irrespective of the number of employees, shall register with the Fund as a contributing employer and shall make regular contributions for his or her employees in accordance with this Act and regulations made under this Act.”
In the old law, an employer would register its employees for NSSF membership and contribution if its employees numbered at least five or more.
Proponents argued during last year’s enactment that mandatory enlistment of formal and informal sector workers, including freedom for individuals to become voluntary contributors, would help expand social security coverage and bolster the Fund’s financials.
Implementation of the provisions was, however, overshadowed for months by the dispute triggered by claims that Gender minister Betty Amongi, the political co-supervisor of NSSF, asked for Shs6b for execution of a mandate that resides with the Fund management.
In defence, including before a parliamentary inquiry, the minister argued that she had legal backing under Section 29(3) of the NSSF Act to vary the Fund’s budget and her proposal to reallocate Shs6b from the operational budget was to engage more stakeholders to implement expanded coverage since Shs257b potential NSSF contributions remained uncollected under the Fund’s leadership.
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That battle, among other allegations and counter-claims, imperiled the prospects of Mr Richard Byarugaba’s reappointment as NSSF managing director, leaving renamed deputy managing director Patrick Ayota to take charge of the Shs17.8 trillion Fund as its acting chief executive.
Addressing journalists in Kampala yesterday, Mr Ayota said “given [that] the law came into force a year ago, employers should have registered and started remitting social security contributions for their employees effective January 7, 2022. However, only 3,200 have registered with the Fund”.
The revised law redefines an “employer” to include the government, any registered business, duly registered partnerships, trustees and managers and sub-contractor.
“We have noted that a number of employers are still not registered with the Fund. We are happy to announce a 30-day window effective [yesterday] for all employers irrespective of the number of employers. Once this window closes, any registration will attract a penalty,” he said.
The revised NSSF law imposes a penalty of 10 percent of the accrued arrears for non-compliance, which compounds every month
The Daily Monitor
