Up until now, workers have had little or no a say in who should handle their savings.
NSSF building in Kampala.
But with the imminent liberalisation of the pensions sector, savers are going to be spoilt for choice. The sector regulator had received 160 applications for licenses by end of April.
Of the 160 about 100 have been approved and are ready for pick up, the Uganda Retirement Benefits Regulatory Authority (URBRA) said.
Obtaining a license is the first step for any player to operate in the new pensions regime as it awaits full liberalisation.
On Monday, URBRA board chairman Andrew Kasirye handed over the provisional license to NSSF- the largest player in the market currently.
The new regulations requires that firms running pensions funds must separate fund management, custodial roles as well as trustees.
Moses Bekabye, URBRA acting chief executive officer said the sector is now approaching a new regime but more needs to be done to educate people to improve pensions participation with only about 9% of the entire working population of 11 million people covered.
URBRA released the regulations in December. To ensure continuity, Kasirye said the regulator decided to license players even as they are yet to fulfill the other requirements like having an investment.
Kasirye said the regulator is bringing orderliness to the sector.
The law establishing the URBRA was passed in 2011 as part of wider efforts to improve the public social security sector that was hit by years of financial scams mostly in NSSF.
Richard Byarugaba, the NSSF chief said the new law will enable the fund to be more competitive with new innovations and the opportunity to invest outside Uganda into larger markets like the Kenyan market for higher returns.
Byarugaba said NSSF has outsourced fund management to Stanlib and Pinebridge whereas Standard Chartered Bank is the sole custodian. The trustee role is still managed in-house.
NSSF has an asset base of over sh3.3 trillion with sh202 billion paid to members.
Byarugaba listed health, maternity and unemployment as some of the products that the Fund is looking to extend to its members once NSSF fully transitions.
Source The New Vision
