A way from last week where we

remained concerned about

scandals in Pension Sector in

Uganda, in Part II we look at the viability

of liberalisation strategy towards cleaning

up the Pensions Sector . During the 9th

Parliament, the Retirement Benefits Sector

Liberalisation Bill , 2011 was tabled to

push the diversification agenda of having

many key players provide social security

services to all Ugandan Citizens. With the

coming into force of the 10th parliament,

this Bill is bound to bounce back on the

floor with proposed reforms that will

significantly alter the way retirement

income is secured for retired workers in

Uganda.

Specific objectives of the Bill are; to allow

private pension schemes to receive

mandatory retirement contributions;

provide for competition among licensed

retirement benefits schemes for mandatory

contributions; allow an employee to choose

a Retirement Benefits Scheme of his or her

choice; provide for annuity as an

alternative to lump sum payment of

retirement benefits; to provide for early or

mid-term access of up to 30 percent of an

employee’s retirement benefits; provide for

transfer of retirement savings from one

scheme to another in Uganda and EAC;

repeal the Pensions Act, Cap 286 and

convert the public service pension scheme

into a contributory scheme and repeal the

National Social Security Fund Act, Cap.

222.

Uganda Debt Network, alongside other

CSOs like Uganda National NGO Forum,

WEEKLY UPDATE V O L U M E 1 . I S S U E 5 0 29th February—4th March, 2016

EDITORIAL

Proponents of Liberalisation of the

Pensions Sector argue that this

strategy will be more inclusive with

more workers saving for retirement.

With NSSF securing less than half a

million workers savings, this

argument is valid. However this

should not be looked at in isolation of

other factors that make liberalisation

questionable like risk of workers’

savings. It is also argued that

diversification of the Pension Sector

will open window for developmental

pension reforms.

Liberalisation opens the operating

space to all commercial players for

purposes of profit maximisation and

this will involve risky investments that

could affect the workers’ savings in

the long run. We keep asking

rhetorically; Is liberalisation of the

Pension Sector viable in ensuring

proper accountability in the Pension

Sector in Uganda?

EDITORIAL TEAM

Julius Kapwepwe—Director of Programmes

Gilbert Musinguzi—Quality Assurance Manager

Adellah Agaba—Communications Officer

Umwiza Elizabeth—Intern

we remain convinced that good policy

reforms in retirement benefits sector

should aim at improving coverage,

reducing costs of administration,

improving benefits and enhancing

efficiency for the entire population and

advance equitable and gender responsive

economic growth and development. We

continue to ask ourselves as to whether the

proposed reforms under the Retirement

Benefits Sector Liberalization Bill, 2011

will expand coverage; improve the amount

or adequacy of benefits; reduce

management and administration costs and

above all reduce risk and improve

efficiency in social security management.

Private pension schemes risky: The

decisions and actions of private pension

firms and fund managers are motivated by

the goal of profit maximization and not

securing the retirement income of workers.

It will therefore be socially and

economically dangerous to put the

mandatory contribution of workers in the

hands of firms that will place them in

investments that might be legally

permissible but practically very risky.

Individual choice of an appropriate

retirement plan: The Bill provides that

every employee in the formal sector shall

register with a licensed retirement benefits

scheme of his or her choice and shall make

regular contributions to the retirement

benefits scheme. Although, the right to

contribute to scheme of one’s choice will

give workers control over where their

money is saved, it will also leave them

with a duty to take decisions with

potentially high risk outcomes. How many

Ugandans understand the concept of

Liberalisation?

So, which way for Uganda? Next week we

will explore more in Part III of the series.

Improving accountability in Pension sector in Uganda: Liberalisation strategy?

(PART II)

UDN appreciates support by: DGF, DCA, USAID-RTI/GAPP,USAID-PATH/ABH, SAVE THE CHILDREN, IG AND TROCAIRE

UDN INTERNETWORKING ACTIVITIES

UDN’s Ms. Esther Mufumba taking part in the Non-

State working group involved in Agriculture

Extension Services advocacy, Imperial Royale Hotel,

February 2016.

UDN’s Ms. Maureen Agaba and Sandra

Coote in a Transparency International

Uganda (TIU) organised workshop on

“Opportunities and Threats to Civil

Society Space”, Hotel Africana,

February 2016.

UDN’s Ms. Peninah Mbabazi, Ms.

Umwiza Elizabeth and Ms. Sandra

Coote in a Review Meeting on CSO

Budget Matrix for 2016/17, organised by

CSBAG, February 2016.

READERS FEEDBACK CORNER - Increased Gov’t Admin Costs.

Uganda Debt Network @ugandadebtnet The

cost 4 public admn must be reduced& savings

invested in areas like infrastructure, agriculture to

enable the poor meet their basic needs.

Nick Wilson @WilsonNicholas @TBukumunhe

@ugandadebtnet That's the waste we have.

Why can't they buy these from wages like any

other employed person.

PLEASE JOIN UDN MEMBERSHIP

Uganda Debt Network @ugandadebtnet Each of

the MPs will be given money for a car and an

allowance wardrobe, among other benefits. Are all

these benefits necessary?

Sentamu Phillip @sentamups @ugandadebtnet

This is getting worse by the year. Who will help

us now?

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UDN PRESS CONFERENCE

Topic: Citizen Expectations of the 10th Parliament Date: 6th March 2016 Venue: UDN Secretariat, Ntinda

UDN UPCOMING EVENTS

UDN Profile

Uganda Debt Network (UDN) was formed in 1996 as coalition of organizations and individuals to

campaign for debt relief for Uganda under the Highly Indebted Poor Countries. In accordance with

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