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Pension firms asked to create tangible benefitsPublish Date: Dec 29, 2013
Pension firms asked to create tangible benefits
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NSSF building

By Vision Reporter

As the complete liberalisation of the pensions sector approaches, the Uganda Retirement Benefits Regulatory Authority (URBRA) has urged licensed firms to create products with tangible benefi ts to lure Ugandans to the sector.

Rose Musonye Kwena, the Retirement Benefits Authority Kenya publicist noted during a recent URBRA media training that the players should be able to offer products such as mortgages.

“There must be tangible benefi ts for savers to enjoy. In the past it used to be just tax exemptions but that cannot be touched,” she explained.

“With benefits like mortgages, even the youth will consider pension schemes to be trendy,” she added.

Currently, the government National Social Security Fund (NSSF) operates as the mandatory pension scheme with assets worth over sh3trillion. The fund has half a million contributing members close to 7% of the working population.

Occupational schemes hold close to sh430b in savings which is mostly managed by international fund managers such as the South African based Stanlib and American based Pine bridge. Insurance companies run parallel umbrella pension schemes.

Moses Bekabye, the acting URBRA boss noted that some of the existing occupational schemes do not follow proper corporate governance rules.

There are over 30,000 private sector fi rms that qualify to remit pension contributions to the NSSF, but only 30% or 9,000 firms currently do, this indicates a compliance problem in the sector. He urged firms to form umbrella schemes where possible to enjoy economies of scale through lower costs of operation.

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