By Our Reporter
The National Social Security Fund (NSSF) has commenced consultations to amend the NSSF Act to allow a portion of a member’s benefits to be utilised as collateral to access a mortgage or loan to acquire a residential house.
This was revealed by Richard Byarugaba, the Managing Director NSSF, in a statement released last week in which he also noted that they are in support of reforms to laws governing retirement benefits schemes in Uganda.
“We have always supported reforms to laws governing retirement benefits schemes in Uganda. Specifically, a law that allows for a portion of a member’s benefits to be utilised as collateral to access a mortgage or loan to acquire a residential house. 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.” Richard Byarugaba said.
The consultations come after the Minister of Finance, Planning and Economic Development Matia Kasaija launched the Uganda Retirement Benefits Regulatory Authority (Assignment of Retirement Benefits for Mortgages and Loans) Regulations, 2022.
According to the regulation, members saving in retirement schemes licensed by the Uganda Retirement Benefits Regulatory Authority (URBRA), will be allowed to secure mortgages and loans using 50% of their savings. The loan will be tied to the construction of cost-effective houses and purchasing land for construction and renovation of a house.
“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 added.
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.
