Analysis of pension contributions compliance in Uganda: A case of National Social Security Fund Uganda

Abstract

The thrust of the study was to analyze pension contributions compliance in Uganda, a case of NSSF. This was achieved by determining the causes of noncompliance in contributions payments, problems facing NSSF Uganda as a result of contribution evasion and assessment of the effect of public education on contribution collection compliance. The population of the study was restricted to employers and employees registered in NSSF Uganda with a focus in Kampala district comprised of employers and employees in the NSSF Branches of City, Kireka, Bakuli, Bugolobi and Kawempe branch. The stratified random sampling method was used to divide the entire population into groups of the most compliant employers, fairly compliant and the non-compliant employers and simple random sampling method was then used to select employers and employees randomly from the group. A sample size of 386 was drawn from a total population of 10,770 employers using the Yamane‘s 1967 simplified formula corrected to proportions. Among the major finding of the study, it was established that the main cause of contribution noncompliance is attributed to financial hardship of the company and fear of losing jobs on the part of employees thus they would not report cases of contribution evasion. It was also found out that the main problem NSSF faced as a result of contribution evasion was distortion of the labour market resulting into a shift of workers to the informal sector as the research found out that majority of the respondents preferred to be self-employed. In assessment of public education on contribution collection compliance, it was found out that majority of the respondents were able to check their statements, were not sure of where to report complaints of noncompliance. Most of them were aware of the benefits offered by NSSF, didn’t have knowledge on how to make online payments and majority of them agreed that NSSF Staff were consistent with the information availed. Among the recommendations made were Flexible terms of payments of employers’ indebtedness to Social security and increase in the number of compliance staff responsible for carrying out inspections on company records.