78 firms to offer pension services

   

MPs during a parliamentary session yesterday. Unlike on Tuesday when the House was almost empty, MPs yesterday turned up in big numbers, with some asking the Speaker to hold those who miss sittings accountable. PHOTO BY GEOFFREY

 

By Faridah Kulabako

Posted  Monday, February 11  2013 at  00:00

In Summary

All schemes must have a trustee deed establishing retirement benefits scheme.

Seventy-eight companies have applied to the Uganda Retirements Benefits Regulatory Authority (URBRA) seeking approval to provide retirement benefits services under the liberalised industry space, the Daily Monitor has learnt.

Of the 78 companies, 11 have expressed interest to provide retirement benefits scheme services, fund managers (seven), administration (five), trustees (53) while two have applied to offer custodial services. A list of firms which will qualify is expected to be out by the end of the first quarter of this year.

Although the names of the applicants are still confidential,the Daily Monitor has learnt that one of the applicants is the National Social Security Fund, the national pensions fund which had monopolised the provision of pension services for years.

Unlike NSSF which has been handling administration, trustee, custodian and fund manager services in-house, the new Act requires that those services are outsourced.

All retirement benefits scheme operating in the country were meant to have applied for licences by September 26, 2012, a year after gazetting the URBRA Act, lest attract a cash penalty not exceeding Shs30 million, or imprisonment not exceeding a year, or both.

However, by that date, the authority which was to oversee the licencing had not yet been put in place.

Finance Minister, Ms Maria Kiwanuka, however, extended the deadline for applications to December 31, 2012, following the institution of a board of directors in October.

This was meant to enable the new board enact the the necessary regulations for the industry.

Mr Andrew Derrick Lwanga Kasirye, URBRA board chairman, said in an interview that the regulations to govern the operations of the different players in the industry have been put in place. The regulations stipulate that all schemes must have a trustee deed establishing retirement benefits scheme as an irrevocable trust to ensure continuity after the founders leave and schemes must keep savers’ and the scheme’s money in separate accounts to ensure that savers get access to their monies when they need it.

A retirement benefits scheme receiving or which intends to receive mandatory contributions will be required to maintain a minimum deposit of not less than one million, two hundred and fifty thousand currency points (Shs25 billion) with the Central Bank or a financial institution approved by the Authority. A currency point is equivalent to Shs20,000.

Firms that will provide custodial services on the other hand, must be financial institutions which must get a no-objection letter from Bank of Uganda before applying to URBRA.

fkulabako@ug.nationmedia.com