Experts call for better governance of pension schemes

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In short
It was noted at the conference that the current size of pension schemes is unknown. This, according to Andrew Kasirye, the Chairman Uganda Retirement Benefits Regulatory Authority (URBRA) still exposes the sector to abuse.

The pension sector in Uganda has beendominated by news that the NSSF board was not consulted in reaching the decision to buy shares in power company Umeme. 
This is currently being played out in a select committee of parliament, with some board members accusing the NSSF Chairman, Ivan Kyayonka of sidestepping them in decision making. 

On Tuesday at a public dialogue on"Corporate Governance in Uganda's Pension Sector" a host of experts that talked indicated the need to have properly instituted boards that can make investment decision for schemes.   

Miriam Musaali the Legal Affairs Manager atthe Capital Markets Authority (CMA) noted that if a competent board is inplace, then they can be easily held accountable.  

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The public dialogue was organized by the Institute of Corporate Governance Uganda. It was noted at the conference that the current size of pension schemes is unknown.  

This, according to Andrew Kasirye, theChairman Uganda Retirement Benefits Regulatory Authority (URBRA) still exposes the sector to abuse. He explains that in reforming the pensions sector, all schemes must have a Board of Trustees to determine their direction.  
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He also said that did approve an investment policy from NSSF, noting that the investment in Umeme had the approval of the regulator.  
Uganda did not have a regulator for retirement benefits until 2012 when URBRA was set-up. URBRA has the task tooversee the entire pensions sector, including NSSF.  

Currently, the bill seeking to liberalize the sector is at the committee level in Parliament. If passed, the NSSF Act will be amended, taking away the power of the fund to determine investments.

These powers will be left to a fund manager, hired by the fund, licensed by URBRA.  Concerns have however emerged that hiring of a Board of Trusties, a Custodian, Fund Manager and Administrator will instead increase the costs of operations for schemes.  

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Kasirye does point out that reforming thesector will require making some hard choices and refutes claims that it will be more expensive for the schemes to implement the new regulations.  

The argument put forward by URBRA that these new regulations will make schemes more efficient. 

Moses Bekabye the URBRAInterim CEO does point out that more efficient schemes will generate a higherreturn for investors, which offsets the costs of hiring professionals.