NSSF Managing Director Richard Byarugaba
National Social Security Fund (NSSF) has started the process of amending the law to allow members who qualify for retirement and pension eligible to swap their accrued benefits for the newly introduced housing loans.
The Minister of Finance, Matia Kasaija on Wednesday said savers who have been members of a retirement scheme for at least 10 years are eligible to borrow from financial institutions against up to 50% of their accrued benefits but this can only be done to get housing loans.
The offer is in the Uganda Retirement Benefits Regulatory Authority Assignment of (Retirement Benefits for Mortgages and Loans) Regulations, 2022.
Members who are eligible for the housing loans under this provision are those whose retirement schemes are registered and supervised by Uganda Retirement Benefits Regulatory Authority (URBRA).
In a statement released on Thursday, NSSF Managing Director, Richard Byarugaba said the NSSF Act currently provides for full protection to members’ contributions and benefits and prohibits any charging or assignment of the same to a third party.
“This constrains the Fund from immediately implementing the recently issued regulations. In this regard, we have commenced consultations with key stakeholders including the Fund’s supervising Ministry with a view to amending the offending clauses in the NSSF Act,” Byarugaba said.
Byarugaba however noted that NSSF has always supported reforms to laws governing retirement benefits schemes in Uganda like one that allows for a portion of a member’s benefits to be utilized as collateral to access a mortgage or loan to acquire a residential house.
Byarugaba added, “This position is further informed by feedback obtained from our members during various post retirement surveys which show that over 68% of Fund beneficiaries spend their retirement money on land acquisition, home improvement and construction.”