NIC falls short on guidelines for pension fund licence

By Stephen Otage
 

Cargo at Mombasa port. Uganda is the largest destination of transit cargo accounting for nearly 80 per centof cargo that goes through Mombasa port. FILE PHOTO 

In Summary

The Uganda Retirement Benefits Regulatory Authority (URBRA) has denied National Insurance
Corporation (NIC) a license to manage pension funds over failure to manage Makerere University pension
funds.

In 2011, Makerere University Academic staff sued NIC to recover Shs27 billion the Auditor General awarded to them as the total amount of pension funds held up by NIC but the matter has not been resolved.

To ensure that the money is refunded, the authority is considering attaching some of the insurance
company’s property to compensate the university dons in line with the Authority’s mission to restore
confidence and repair the image of the sector as mandated in the 2011 Act.

According to the URBRA board chairperson Mr Andrew Kasirye, much as the Authority came into force after the NIC-Makerere University debacle, their investigations reveal that Makerere University and NIC had an undertaking in which NIC failed to honour its side of the bargain.

“… NIC has the longest history in managing pension funds but they took the Makerere money which they must refund. Recently, they came to us for licensing but we reminded them about their past record which they
must correct before we grant them a license to operate a pension’s scheme,” Mr Kasirye said.

Mandate
The pensions Authority is mandated to restore confidence in the pensions sector following negative
publicity generated by fraud in National Social Security Fund, Makerere University DAP Scheme and the
Public service pensions scheme.

“Among the requirements for a pensions operator is to have a board of trustees that has been thoroughly
scrutinised and an administrator of the funds. In the case of NIC the Insurance Regulatory Authority has
been engaging them and they may end up attaching the NIC building to recover the money but negotiations
are going on,” he said.

When this newspaper contacted NIC for a comment on the matter, NIC public relations officer Angella Ajuko promised to get back to us to comment on the matter in due course.
“... Let me first ask for permission then I will call you,” she said.

THE REQUIRMENTS

Board of trustees. The pension providers should have a thoroughly scrutinised board of trustees with clean
records.
 

Fund administrator. Investing pension monies will be done by fund managers on behalf of pension schemes as provided for in the URBRA Act.
 

Registration. The board of trustees appoints registered certified fund administrators with re-insurance
certificates.