President Museveni has vowed to sort out the issue of pension fund regulation after it emerged that the Ministry of Finance was using National Social Security Fund’s (NSSF) resources to manage the Uganda Retirement Benefits Regulatory Authority (URBRA).
“They set up an authority to regulate private pension schemes and it is the workers funding it? A regulator comes in because of private saving schemes. I rejected that idea..” said Museveni.
This was during a stormy meeting with Workers’ representatives and National Social Security Fund (NSSF) executives at State House Entebbe this Wednesday.
He said while the idea of regulation for private schemes is good, it must not be done with workers’ money.
The Minister of Finance Matia Kasaija said the President rejected the idea, but Parliament enacted it into law.
“We may have to look at the law again,” he said.
Patrick Ocailap, the Deputy Secretary to the Treasury in the Ministry of Finance, Planning and Economic Development also informed Museveni that there are over 120 schemes including the NSSF.
He said the Authority is like Bank of Uganda which supervises other banks.
The URBRA Act was established passed by Parliament in 2011 to establish the Uganda Retirement Benefits Regulatory Authority to regulate the establishment, management and operation of retirement benefits schemes in Uganda in both the private and public sectors.
It’s also mandated to supervise institutions which provide retirement benefits products and services; and to protect the interests of members and beneficiaries of retirement benefits schemes.
However, Museveni suggested that the law is scrapped.
“The law must start with logic! Why workers money? Why can’t a department of government do it? Bank of Uganda Supervises money makers but this is workers’ money. I don’t see why we need a regulator. If private yes, but not NSSF! We shall study it and perhaps do away with regulation and have a department,” he said.
In 2015, President Museveni rejected proposals by the Ministry of Finance for the Retirement Benefits Sector Liberations Bill, which, if passed, would put an end to the monopoly of NSSF.
He said splitting the management of workers’ savings would hamper the enhancement of its value.
“Having one player is advantageous in a way because you have huge sums of money available for projects,” said Museveni.
NSSF Managing Director Richard Byarugaba said URBRA was created at the time they were talking of liberalizing the sector.
“The President rejected it but parliament passed it,” said Byarugaba.
The NOTU Chairman General Usher William Owere had protested to the President that URBRA was using workers money for its operations and even wants to supervise NSSF which is more professionally grounded to handle workers savings.
Another representative of workers, Charles Bakabulindi urged the President to look into the creation of URBRA with interest.
“We request you to look into the composition or URBRA and that of NSSF and you will know why it was created,” he said.
URBRA is under the Ministry of Finance but is semi-autonomous, with a governing board and a management team led by an executive director as the chief executive officer.
When URBRA was established, it was anticipated that new retirement benefits managers would be licensed and the sector would be liberalized and improved, with more choices and new retirement products introduced.