Martin Nsubuga, the URBRA acting executive director
What is the status of the pension sector in the country today?
The structure of our industry is scheme based. They are sponsored by members and their employers.
Apparently, we have 64 licensed schemes and eight umbrella schemes. The latter emerged out of ...
concerns from some members who could not migrate into the licensing requirement given that there are many associated costs.
It was thought that if some of the smaller schemes come together under an umbrella, they can share expenses on trustees and such other service providers.
The structure of our industry is scheme based. They are sponsored by members and their employers.
Apparently, we have 64 licensed schemes and eight umbrella schemes. The latter emerged out of ...
concerns from some members who could not migrate into the licensing requirement given that there are many associated costs.
It was thought that if some of the smaller schemes come together under an umbrella, they can share expenses on trustees and such other service providers.
But how are these numbers today, are they growing as per your projections?
Following a research we did last year, they are not growing as fast as we had projected.
We were able to license three against a target of five that we were registering on average over the past years. This year, we believe it will move up to at least five more.
Following a research we did last year, they are not growing as fast as we had projected.
We were able to license three against a target of five that we were registering on average over the past years. This year, we believe it will move up to at least five more.
Why can’t you have at-least 10 schemes registered annually?
You know, the reason is that this sector is better managed with not so many schemes but probably bigger numbers of savers.
That is the trend in the region and across the world. From a regulatory perspective, the trend is moving more towards umbrella schemes and less of individual schemes.
You know, the reason is that this sector is better managed with not so many schemes but probably bigger numbers of savers.
That is the trend in the region and across the world. From a regulatory perspective, the trend is moving more towards umbrella schemes and less of individual schemes.
You are emphasising umbrella schemes as a pointer to growth, why?
We expect to see more mergers going forward. One of the initiatives the Authority has started through the board is to develop regulations on mergers to see the long-term development of the industry.
The 64 schemes we have today are enough, but perhaps mergers can help strengthen the sector.
Most of the umbrella schemes are sponsored by insurance companies. We are convinced that by their nature now and attracting participation of employers by way of retaining their staff.
Umbrella schemes, give leeway for product innovation, growth and benefits as well as allow enrolment of more members.
We expect to see more mergers going forward. One of the initiatives the Authority has started through the board is to develop regulations on mergers to see the long-term development of the industry.
The 64 schemes we have today are enough, but perhaps mergers can help strengthen the sector.
Most of the umbrella schemes are sponsored by insurance companies. We are convinced that by their nature now and attracting participation of employers by way of retaining their staff.
Umbrella schemes, give leeway for product innovation, growth and benefits as well as allow enrolment of more members.
What are the numbers around the growth of the pension sector?
The growth is more on the numbers of membership. We see the schemes enrolling many members.
The portfolio is also growing. When the Authority was started, the portfolio was just about Shs3 trillion and that was basically National Social Security Fund (NSSF).
But now NSSF is at Shs9 trillion as of today and other schemes hold approximately Shs1.6 trillion.
The growth is more on the numbers of membership. We see the schemes enrolling many members.
The portfolio is also growing. When the Authority was started, the portfolio was just about Shs3 trillion and that was basically National Social Security Fund (NSSF).
But now NSSF is at Shs9 trillion as of today and other schemes hold approximately Shs1.6 trillion.
What is the outlook for this sector, going forward?
It is growing steadily. We can only assure the public that the regulatory regime is strong.
The structure is built in such a way that it gives a lot of powers to trustees, whom we subject to substantial tests before we qualify them.
It is growing steadily. We can only assure the public that the regulatory regime is strong.
The structure is built in such a way that it gives a lot of powers to trustees, whom we subject to substantial tests before we qualify them.
How do you qualify them?
We have introduced the need for detailed financial competence, technical competence and integrity ascertained through Interpol.
We have introduced the need for detailed financial competence, technical competence and integrity ascertained through Interpol.
How about in terms of operations?
We have the other layer of different service providers domiciled in the country, who provide them with technical expertise in terms of fund management, scheme administration and custodial services.
We have the other layer of different service providers domiciled in the country, who provide them with technical expertise in terms of fund management, scheme administration and custodial services.
Is the money for savers safe?
This fear that these funds can be mismanaged by service providers should not suffice.
These are entities in the country although their parent companies are domiciled in mainly neighbouring Kenya.
There is no way a fund manager can mismanage these funds. His role is to provide technical advise.
The law requires them to have an investment policy statement which they execute. This is developed by the trustees through an expert.
This fear that these funds can be mismanaged by service providers should not suffice.
These are entities in the country although their parent companies are domiciled in mainly neighbouring Kenya.
There is no way a fund manager can mismanage these funds. His role is to provide technical advise.
The law requires them to have an investment policy statement which they execute. This is developed by the trustees through an expert.
But many are concerned about where these funds are invested?
These funds are in government securities, which account for almost 70 per cent of the entire market and equities.
These funds are in government securities, which account for almost 70 per cent of the entire market and equities.
Are the custodians in the country?
Yes and regulated. Most of these are commercial banks operating in the country.
There are no leakages. Efficient management of these schemes can be justified by their current returns.
Yes and regulated. Most of these are commercial banks operating in the country.
There are no leakages. Efficient management of these schemes can be justified by their current returns.
But can’t funds be moved out of the country unknowingly?
There is no direct access to these funds. The investment vehicles in the country are absorbing these funds profitably.
We know their risk options are safe because of the regulation.
The money is invested in assets in the country where we have an oversight.
There is no direct access to these funds. The investment vehicles in the country are absorbing these funds profitably.
We know their risk options are safe because of the regulation.
The money is invested in assets in the country where we have an oversight.
How is the future outlook for the sector?
We see more certainty and growth in this portfolio. The only challenge is the limited investment options.
We have licensed two voluntary schemes as well as NSSF to enroll voluntary savers.
We have seen vibrancy in terms of numbers, assets and growth in expertise. Once this is fully achieved then the trustees will be able to run the schemes efficiently.
We see more certainty and growth in this portfolio. The only challenge is the limited investment options.
We have licensed two voluntary schemes as well as NSSF to enroll voluntary savers.
We have seen vibrancy in terms of numbers, assets and growth in expertise. Once this is fully achieved then the trustees will be able to run the schemes efficiently.
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