President Museveni has hinted at scrapping the Uganda Retirement Benefits Regulatory Authority (URBRA) and replace it with just a department after worker’s representatives raised red flags over NSSF funds being used to manage URBRA.
URBRA is a government-owned, semi-autonomous agency responsible for regulating, licensing, supervising, and controlling the retirement sector in the country.
On Wednesday, workers representatives asked President Museveni to take keen interest into the creation of the body.
The NOTU Chairman General, Usher William Owere said during the meeting at State House in Entebbe that URBRA is using workers’ money for its operations adding that the same body wants to take over the supervisory role for NSSF which he said is more professionally grounded to handle workers savings.
Another workers’ representative, 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.
Speaking in response, the president said he will soon be forced to sort out the issue of pension fund regulation after emerging that the Ministry of Finance is using NSSF funds to manage 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,” Museveni said.
He said while the idea of regulation for private schemes is good, it must not be done with workers’ money.
“We may do away with it and have a department.”
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 also informed him that there are over 120 schemes including the NSSF.
He said the URBRA is like Bank of Uganda which supervises other banks.
“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 Planning and Economic Development 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 sum of money available for projects.”
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,” he said.
URBRA was established by an Act of Parliament in 2011.
The agency is under the Uganda Ministry of Finance and Economic Development 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.