Minister of Finance, Matia Kasaija has put on hold plans to inaugurate a new Board of Directors at the National Social Security Fund (NSSF), Chimp Corps report.
This came after representatives of Workers Unions protested the criteria used to select board members.
ChimpReports understands nominees of Workers Unions were not included on the board, kicking off a firestorm that threatens to derail the operations of the Fund.
The nominees are said to have been found “unfit” hence disqualification of their candidature for the board.
“Hon Kasaija has stopped all appointments of board members,” said National Organization of Trade Unions (Notu) chairman, Mr Wilson Owere.
Owere said Kasaija took the decision today Thursday while meeting with NOTU leaders at the Ministry of Finance board room.
The meeting was attended by State Minister for Education and Sports, Charles Bakabulindi, Peter Werikhe, lawyer Richard Rwabwogo among others.
NOTU recently held a press conference where they denounced the extension of the Managing Director’s reign from three to five years.
They further protested the declaration of 15% interest on NSSF customers’ savings, saying the board had endorsed a 13.5% interest rate.
Owere accused NSSF management of encouraging Kasaija to announce a higher rate which workers say is not sustainable in the long run.
The NSSF board had earlier informed Kasaija that when the Fund “declared a rate of 14 percent in 2008, the Fund went into a deficit position of over Shs 50bn. By 2009, the accumulated deficit stood at more than Shs 43bn; a precarious financial position.”
However, NSSF MD Richard Byarugaba said the 15 per cent interest was based on the returns from all of the Fund’s investments such as cash returns which includes interest from fixed income investments, dividends from shares in companies and rent from real estate properties.
Experts say any delays to have the board up and running is a big risk to the operations of the board.
The NSSF Board of Directors approves investment decisions of the fund; endorses high procurements and provides oversight of management.
“It would be dangerous for the Fund to operate without a board. Who does the internal auditor report to if the board is non-existent? There can’t be serious business at NSSF without a board,” said a staff member who chose anonymity to speak freely.
“The earlier we got an inclusive board, the better.”
While the new legal framework requires rigorous assessment of nominees for the appointment on Boards of Trustees of Retirement Benefits Schemes to ensure their integrity and suitability, failure to have the workers’ representatives on the board could ignite endless fights at the Fund.
Kasaija recently asked workers unions to nominate fresh members for positions on the board of directors.