Claiming NSSF early is like drunken wife beating

There is a deep Luganda saying about the dangers of misguided peer influence. The saying goes like “He who says let’s go beat the women punches a banana plant” (Tugende tukube abakazi akuba kitooke). It summarizes a boozing episode of two guys who after several drinks start complaining about having to return home ‘early’ just because their wives complain over their late coming. The crafty of the two says that the best way to cure the women from nagging over their staying out late is to give them a sound beating so they don’t dare complain again. The idea sounded very good and the friend could not wait to go and try it out.

After a few more drinks they set off for their homes, vowing to teach their wives a lesson. The crafty and malicious one who brought up the idea stopped a short distance from his house and started punching and kicking the rather soft banana stem in his garden. He beat it so hard, venting all his drunken anger on it until after several minutes he was exhausted, walked up to his house and humbly asked to be let in. The moment his wife opened the door, he fell on his knees and started begging for forgiveness, promising not to be late again. The wife served him dinner, prepared his bath and told him not to worry. Their marriage grew stronger due to the humility the man displayed whenever he did wrong.

His friend on the other hand went home, kicked the door and proceeded to give his wife the beating of her life while reminded her that he was the man and she should never ask him why he returns late from drinking. He beat her until he was exhausted and he went to bed. In the morning, the bruised woman packed her things and left him for good. He got so disorganized that his life became a mess as he deteriorated until could no longer fit in the company of his former friend who misled him into beating up his wife.

The above story came to mind when I read that some members of parliament were mooting an amendment to the amendment bill of the National Social Security Fund Act to enable contributors to access thirty percent of ‘their’ money when a matter like Covid-19 comes up. We are yet to see the phrasing of the proposal to know for sure whether the “30%” refers to 30% of one’s accumulated expected benefits which includes the employer’s contribution for most members, or 11% of the expected benefits which is the one third of what the member has contributed so far plus the interest accruing. For MPs who will oppose the proposal could argue the employer’s contribution should only become a member’s entitlement at retirement time. Of course we are aware that for voluntary contributors ALL the savings are contributed by the member.

To understand the situation, I called up a staff of the NSSF seeking an update of the state of affairs at the Fund since the Covid-19 lockdown started. I asked for information which you too can get from this public body. If the Covid-19 lockdown has hit members so hard as to want to access money that is supposed to help them when they are no longer able to work, then obviously they wouldn’t be able to continue contributing during the lockdown in the first place, would they? What I found from the fund was interesting. Since individual contributions were allowed a couple of years back, these would be the first to be hit since they are not deducted by law, but are voluntarily remitted by the individual member, right? Wrong.
Not only have the individual members continued to remit their money, but hear this, some six thousand Ugandans signed up and started saving with NSSF in the month of April during the lockdown!

Is it realistically possible that those six thousand people who chose to voluntarily start taking their money to NSSF during the lockdown month of April alone have never heard of the Coronavirus? So who has been working the people up about accessing their retirement package because of Covid? Is not possible that like the malicious guy who told drinking mate to go beat his wife, some people are gleefully taking their money to NSSF where they are sure it will earn double digit compound interest while telling the excitable ones to fight and withdraw theirs?

Assume Parliament amends the law to enable NSSF members access 30% of their benefits during Covid-19-like situations, then let those who want go ahead and collect it. The prudent ones who appreciate what the money is intended for will not. But first of all, we frequently encounter more dangerous situations than the Coronavirus. Many more people have lost their children to malaria than the ZERO who have died from Covid-19 in Uganda. So should anybody whose child gets malaria be allowed to access 30% of their NSSF benefits? And if three of your children get malaria in one year, shouldn’t be able to take away all your benefits from NSSF, going by that logic?

Secondly, since Parliament would be amending the law to make NSSF benefits readily accessible when members get problems, the Fund would have to change from investing the members’ savings to simply keeping the cash in demand deposits which do not earn interest. In fact the way banks operate in Uganda today, members would be charged a monthly fee for keeping money in NSSF, so that you get less in benefits than what you and your employer kept there. Logically then, there would be no point in having the NSSF, as all members can keep their money in their bank accounts to access whenever we get a situation like this one which has not yet killed any Ugandan since it erupted at the start of the year.

It is possible, actually easy, to get Parliament to amend the law and allow NSSF members to claim their money when they get a problem. MPs after all do not contribute to NSSF except those who voluntarily do after realizing that that it is one  of the safest ways to secure yourself financially when you can no longer work. The MPs would easily pass the amendment if they think it will please the voters especially as the general election approaches. Then like the careless drunkard who beat up his wife, those who will withdraw their benefits prematurely will live to regret in their old age, an age which will certainly come unless one dies young.