The National Social Security Fund’s move to shut down its old e-collection system and adopt a more advanced tech savvy portal last year coupled with increase in compliance has boosted its capability to collect more employee contributions, according to its Managing Director, Richard Byarugaba.
The Fund has since registered nearly 5,000 new members through a partnership with the telecom firm MTN raking in billions of shilling in collections.
Byarugaba, who was speaking during the NSSF Torch Awards 2017 said the initiatives have enabled the Fund to hit Shs7.6 trillion in savings.
“The improvement in collections is owed to the fact that our compliance levels have been improving, our collection methodology has been improving; we automated our systems, brought services closer to our members through social media, electronic media, and we think that our members are rewarding us by paying their employee contribution,” he said.
He said NSSF, for instance, collected more than Shs100 billion in contributions from its members in the month of June 2017, the first time that the Fund has collected such huge contributions in a single month. The previous highest amount was Shs 85 billion that was collected in June last year.
Under the current law, only employers with five or more employees are required to remit monthly contributions for their employees within 15 days. Employers deduct 5% of the worker’s salary and top it up with a 10% contribution, remitting the 15% to NSSF.
The money collected is invested in various business ventures including shares on the securities exchange, bonds, equities and real estate.
This development comes at the time a new bill dubbed Pension’s Liberalisation Bill is before parliament seeking to empower workers to choose which pension fund provider is best placed to manage all or some of their mandatory contribution.