Allowances were the most common employment benefits for permanent staff, offered by 67.6% of establishments, a survey by the Uganda Bureau of Statistics found. It also found that only 58.8% of the establishments that should make contributions to the National Social Security Fund were registered with the fund.
The second most common benefit for permanent workers were non-cash benefits such as insurance, funeral, leave, and grants, provided by 9.8% of surveyed establishments. Pension came next, offered by 9.6% of establishments, gratuity by 9.2%, and a lump sum at retirement by 3.3%.
The survey was commissioned by the Uganda Retirement Benefits Regulatory Authority to identify existing employment benefits and to find out why some employers don’t provide retirement benefits to their employees.
It collected information from 2,933 establishments employing 106,403 people in the private and public sectors, as well as NGOs, in ten districts. Most establishments employed between 10-49 people.
The benefits provided to temporary employees – those whose appointments are for a year or less with a specific expiry date – are fewer. Most establishments, 24.8%, provided allowances, followed by non-cash benefits provided by 2.6% of surveyed establishments, pension by 2.1%, gratuity by 1.1%, and a lump sum payment by 0.4% of establishments.
The survey defines allowances as “money given to an employee for a specific purpose e.g. travel allowance, bonus, honoraria etc.” They are preferred by employers because of their flexibility and ease to manage, especially for employees who are not permanent.
The reasons cited by employers who do not offer retirement plans are lack of awareness, the cost of setting up the plans, and funding. The lack of a provision to establish voluntary retirement benefits arrangements in institutional policies was also given as a reason for the absence of plans.
Additionally, some employers lack the “technical capability to design and administer these benefits” because they don’t have qualified personnel equal to the task, according to Patrick Ngolobe, the president of the Human Resource Managers’ Association of Uganda and the head of Human Resources at Umeme Ltd.
“Employers and government must appreciate the human capital management is a science and only those that are technically competent should be hired to deliver these services,” Mr Ngolobe said. He added that human resource professionals are drafting a bill to be discussed and enacted later to “help streamline human capital management in the country.”
Employers with retirement plans said it motivates, attracts, and helps in retaining talent, the report said. They also said such plans show workers and other businesses that they are stable and enduring firms.
Most of the establishments surveyed were in the education sector, comprising 35% of the entities. Finance and insurance had 11%, accommodation and food services accounted for 9.1%, and trade for 8.3%. The greatest number, 81%, were in the private sector, 10% were NGOs, and the rest public sector.
The sector with the largest proportion of its organisations contributing to NSSF was electricity with 91.7%, followed by public administration and defence with 85.7%, and multinationals with 80%. On the other side of the scale were agriculture forestry and fishing with 35.7% registered with NSSF, professional, scientific and technical activities with 45%, and education with 49.7%.
Last year, NSSF launched a whistleblower campaign for employees to report employers who should be contributing to the fund but are not. As of February, the fund had collected Shs1.8 billion from previously errant firms, basing on information provided by 140 whistleblowers.
About 12,000 employers out of the 25,000 mandated to contribute to the fund are not doing so, according to NSSF’s head of marketing and communications, Barbara Teddy Alimi. Of the 13,000 complying, only 8,900 consistently remit to the fund. Organisations with five or more employees are required to register with the fund.
When asked what support organisations need to start a voluntary retirement benefits scheme, 81% mentioned sensitisation of employers and employees on retirement plans and savings, according to the report. The second most popular recommendation was support for employers to establish the schemes, mentioned by 13.1% of establishments, while 2.4% called for more vigilant enforcement of laws requiring joining a savings and pension scheme.
Only 1.2% recommended a change in the law to increase coverage. Parliament is currently reviewing a bill, the Retirement Sector Liberalisation Bill 2O11, that seeks to liberalise the retirement benefits sector. Currently, there’s only one establishment – NSSF – to which the private sector can contribute pensions.
