Former MP calls for voluntary NSIF contributions or suspension until fund is ready

Former national Member of Parliament Felix Edward Bali has called for the suspension of compulsory contributions to South Sudan’s National Social Insurance Fund (NSIF), saying the process should be delayed until the institution completes the necessary preparations and addresses concerns raised by employers and employees.

Bali says the fund needs to establish proper registration and record-keeping systems, clarify its administrative procedures and ensure that workers’ contributions are protected before compulsory remittances proceed.

Speaking on the Around South Sudan podcast, Bali explained that he raised a motion in Parliament in June calling for the suspension of a circular directing employers to remit both employee and employer contributions to the fund.

He said his concerns were based on the fund’s legal framework, the procedures used to issue the directive and the composition of its board of trustees.

“When I raised that motion to suspend the memo, it was on three grounds,” Bali said, explaining that he questioned the authority used to issue the circular, the absence of regulations to guide the fund’s operations and the lack of representation for employers and employees on the board.

Concerns over the fund’s readiness

Bali said one of his main concerns was that the fund had begun implementing the contribution system before putting the necessary administrative structures in place.

He said he visited the fund’s office to establish how it was operating and why the Ministry of Labour’s Undersecretary had issued the directive on its behalf.

“When that time I went, still they were operating in a small office somewhere,” Bali said, adding that the managing director was not available during his visit.

He also questioned whether the fund had established a proper system for registering employers and employees and tracking their contributions.

“The registry system is not there to take a social insurance, to take the money of the employee and employers,” he said.

Bali said he had asked employees whether they had received social insurance numbers and received negative responses. He said employers he consulted also told him they had not been issued registration numbers.

He argued that these details were essential to ensure that every contribution could be traced to the person entitled to receive the benefits.

“You cannot take money you don’t know it belongs to who and the terms of the contract of that person,” he said.

According to Bally, the absence of a reliable registration and record-keeping system could create disputes over contributions and make it difficult for employees to verify whether their money had been properly remitted.

Questions over the directive

Bali also challenged the procedure used by the Ministry of Labour to direct employers to remit contributions to the fund.

He argued that the National Social Insurance Fund should issue its own directives through the appropriate administrative channels rather than have the ministry act on its behalf.

“If they are not ready, they should not write as a Ministry of Labour,” Bally said.

He compared the arrangement with the relationship between the Ministry of Finance and the South Sudan Revenue Authority, arguing that a supervising ministry should not automatically act on behalf of the institution it oversees.

Bali said the fund should first complete the necessary preparations and establish the procedures required to manage contributions.

Calls for voluntary contributions or a suspension

Bali maintained that the implementation process should not be rushed while questions over the fund’s readiness and the protection of workers’ money remain unresolved.

His position is that compulsory remittances should be suspended until the necessary systems and procedures are in place. He has also advocated allowing more time for preparations rather than immediately compelling employers to transfer contributions.

Bali said the law provides for employers to remit contributions retained for employees once the fund has been properly established and the required procedures completed.

He argued that delaying the process would give the institution time to prepare without necessarily depriving workers of the contributions due to them.

“It is people’s money,” Bally said, stressing that the fund must demonstrate that it can properly account for contributors’ funds.

He warned that collecting contributions before the system is ready could lead to disagreements between employers and employees, particularly if workers believe deductions have been made without proper records or clear information about their benefits.

Dispute over representation on the board

Another concern raised by Bally relates to the representation of employers and employees on the fund’s board of trustees.

He said the board had been formed before the relevant employer and employee groups had established their bodies and selected representatives.

According to Bali, the registration process should enable employers and employees to organise themselves and nominate people to represent their interests.

He said some employees had told him they were not consulted about the selection of their representatives.

“The employees say that person is not part of them,” Bally said, describing the concerns raised during his inquiries.

Bali argued that the groups contributing to the fund should have a meaningful role in choosing their representatives because the board will participate in decisions affecting their money.

He also questioned why the fund’s management should insist on particular representatives rather than allow employers and employees to select their own candidates.

Short-term contracts and contribution requirements

Bali further raised concerns about how the scheme would accommodate employees working under short-term contracts in private companies and non-governmental  organisations.

He said some workers have contracts lasting only three or six months, raising questions about how their contributions would be handled and what benefits they would qualify for.

He pointed to the 180-month contribution period, equivalent to 15 years, discussed under the scheme, arguing that this requirement could be difficult for workers whose employment is not stable.

“The nature of employment these days are not stable,” Bali said.

He called for clearer provisions explaining how contributions and benefits would be handled for employees who leave their jobs before completing the required contribution period.

He also said employers and employees needed better information about the contribution structure, under which eight percent is deducted from the employee and 17 percent is contributed by the employer, making a combined 25 percent.

Calls for dialogue and confidence-building

Bali acknowledged that the fund had made some progress in preparing its internal regulations and other documents since he raised the matter in Parliament. However, he said more work was needed to address outstanding concerns and build confidence among contributors.

He urged the fund’s management to engage employers and employees directly, explain the law and relevant regulations, and clarify how contributions would be collected, recorded and used to provide benefits.

Rather than allowing disagreements to deepen, he said the concerned parties should meet and seek an understanding on the implementation process.

In his closing remarks, Bally reiterated that the fund should delay compulsory remittances until contributors’ concerns are addressed.

“My final suggestion to the fund is they have to delay this,” he said.

“They have to delay the remittance for a purpose to get a trust of the beneficiary, to know exactly why this money is being taken. It is for the benefit of the employees.”

Bali said the ultimate objective should be to establish a system that protects workers’ contributions and gives them confidence that the fund will deliver the benefits intended under the law.