Committee of Public Service cautions Minister over Pensions Fund
The Committee of Public Service and Local Government has cautioned the Minister of Public Service, Hon. Muruli Mukasa against commercialisation of the Pensions Fund saying this may lead to recurrence of the challenges faced by the National Social Security Fund (NSSF).
The minister appeared before the committee on Tuesday, 28 March 2023 to present his views for consideration of the Public Service Pension Fund Bill, 2023.
The Committee Chairperson, Hon. Godfrey Onzima said that the committee is uncomfortable with the investment provisions in the Bill saying that the core objective of the Bill is to streamline payment of retirement benefits.
According to Section 59 (1) states that, ‘The assets of the Fund shall only be invested in accordance with this Act and any other law in force in order to maximise returns on investment for the Fund’.
“We shall hold further consultations on this provision. The commercial aspect in the Bill will kill its objective. At some stage, we might be forced to delete this provision,” Onzima said.
Onzima also asked the minister to look closely into the provision on suspense accounts saying that the NSSF management was accused of mismanaging funds under the suspense accounts.
“We request you to take into consideration problems faced by the NSSF with suspense accounts. Is there a provision to look for those beneficiaries after the contributors have died? Is there a provision to see how such beneficiaries access the pension?” Onzima asked.
The legislators also cautioned the minister against giving the board of the Pensions Fund un-regulated powers saying this may lead to mismanagement of the Fund.
Hon. Baatom Koryang (NRM, Dodoth West County) however, said that allowing the board members to borrow from contributors’ funds will provide an avenue for mismanagement of the Fund.
“The risk with this is that some board members may be unscrupulous and will mismanage the contributors’ funds. Why would the board borrow from a fund that members are contributing to?” he asked.