Guard against more Pension Fund fraud

A section of the Pension Towers currently under construction. Some stakeholders say the Fund is investing in unviable ventures. Photo BY RACHEL MABALA.

Recent reports that former captains of the National Social Security Fund hatched a scheme to earn private interest on money meant for purchase of stocks are not astounding given the abuses that came to characterise the previous administration of the pension fund.

Under the hideous scheme, top managers of the Fund allegedly approached financial institutions looking to lure them into their scheme as they sought to defraud the Fund of millions of shillings. The proposals that were made to managers of financial institutions would have seen them earn private interest on money meant for the purchase of various stocks for the Fund. Money meant for share purchases would be traded on the interbank market by the Fund’s brokers. The interest earned would then be shared by the managers and the brokers before proceeding to purchase the shares.

Ugly as they are, these schemes provide lessons that we can only take for granted at the peril of the contributors to the Fund, especially with the awareness that the initiators of these shenanigans were senior managers at the Fund.

Much as the current management of the Fund is yet to appear in the news for the wrong reasons, its contributors will need assurances that they have entrusted their mostly hard-earned savings in trustworthy hands.

Encouraging strides towards reformation have already been taken and among them is the increased tracking of communication between senior managers and the NSSF board. With plans to liberalise the pensions sector underway, the hope is that the national pension fund would benefit from increased oversight and stronger demands for quality service provision.

After all the years of mismanagement and breach of public trust, we need to break this crippling vicious cycle. Some truly decent Ugandans have turned around moribund institutions into highly efficient entities.

These Ugandans can be emulated. We challenge the new managers of the Fund to rise above these ugly schemes and turn the Fund into an entity of good repute in this country.