Richard Byarugaba, the Managing Director of National Social Security Fund (NSSF) says the fund will have to set aside Sh1 trillion if the President assents to the NSSF (Amendment) Bill, 2021. Parliament passed the Bill last month.
Among the key provisions in the bill is it allows individuals who are aged 45 years and have saved for at least ten years, and those living with disabilities, to access 20 percent of their savings.
Speaking at the annual seminar for the Institute of Certified Public Accountants in Entebbe on Friday, Byaruhanga said that the latest figures show that 113,000 savers are eligible for midterm access, up from 93,000 three months ago.
Byarugaba says NSSF will have to pay Sh1 trillion if all those who are eligible for midterm access turn up at the fund. NSSF currently has two million contributors and over Sh15 trillion in assets.
However, Five Trillion Shillings is held in equities and real estate, which Byarugaba says cannot be liquidated. He adds that the fund would have to liquidate some of its fixed-income assets like bonds to cater for midterm access payments.
The fund will also have to set aside Sh 900 billion to pay benefits of close to 26,000 savers who will retire in this financial year 2021/2022.
Byarugaba added that the fund will organize financial literacy discussions with those eligible for midterm access.
Constant Mayende Othieno, the President of CPA, has praised Byarugaba for transforming NSSF since 2010 and hopes other accountants and managers will emulate him.
Walter Yorac Nono, the Director Internal Audit at Makerere University advised other savers who are eligible for midterm access to their benefits to consider other options.