There is uncertainty at NSSF as five members representing unions have failed a ‘fit and proper test,’ a pre-requisite to sit on the board.
KAMPALA - There is uncertainty at the National Social Security Fund (NSSF) as five members representing unions have failed a ‘fit and proper test,’ a pre-requisite to sit on the board.
The requirement is needed for the fund to hold an operational license from Uganda Retirement Benefits Regulatory Authority (URBRA).
Under Sections 40-46 of the Uganda Retirement Benefits Regulatory Authority Act 2011, all board members are required to apply for a trustee licence from URBRA.
The URBRA Act requires, among other things, for trustees to have adequate professional, technical knowledge, experience or operational ability to perform the functions of a trustee.
Section 43(e) says a person shall not be licensed as a trustee of a retirement benefits scheme if he or she is not a fit and proper person and allows for a revocation of a license under Section 45.
Part II of the Act (criteria for determining a fit and proper person for purposes of acting as a trustee) mentions professional suitability and experience.
However, NSSF members, who include Musa Okello, Henry Mukasa, Agnes Kunihira, Christopher Kahirita and Richard Bigirwa do not meet the requirements.
Okello, Mukasa, Kunihira and Kahirita do not have the requisite academic credentials, while Bigirwa defaulted on a loan from Dfcu Bank.
“While Bigirwa has a Bachelor of Management Science degree and had initially passed the test, he later failed when it emerged he had defaulted on a Dfcu Bank loan,” the source said.
According to the source, Bigirwa joined the Dfcu board in 2009 on secondment by NSSF, one of the major shareholders as a replacement for then suspended MD David Jamwa.
“Bank of Uganda rescinded their decision on Bigirwa after learning that he had earlier been removed from the Dfcu board for having defaulted on a sh50m loan,” said the source.
Saturday Vision has learnt that URBRA, the regulator is caught between a hard rock and a stone given that disqualifying the five board members would cause a repeat of the drama that unfolded between the trade unions and the Ministry of Finance over union representation on the board.
This is the second time the appointment of the trade unionists is raising questions.
In July 2012, after their appointment by the minister, a cross-section of some workers unsuccessfully petitioned the minister to remove the five from the board.
Analysts said that unionised workers, who form about 40% of NSSF’s members, but only less than 10% of the total contribution are overrepresented.
Out of the 10 board members, five are from trade unions, while the rest of the non-unionised workers who contribute the bulk of the monies are not represented at all on the board.
“To abate the situation URBRA has instead appointed the board members as board of trustees, something not provided for under the law as they wait for the current board’s tenure to expire in May 2015,” the source said.
The NSSF board chairman Ivan Kyayonka referred Saturday Vision to the Ministry of Finance.
“It is the minister who appointed those people. It is not my job to check whether they are qualified or not,” he said.
Saturday Vision was unable to speak to minister Maria Kiwanuka as she did not pick her phone calls.
When contacted for a comment, the acting CEO URBRA, Moses Bekabye admitted the members are indeed illegally sitting on the board.
“But we have we looked at the pros and cons and decided to let them stay.”
He said they realised that kicking them out would have a destabilising as the members are political appointments.
“We decided to allow them to serve their tenure after which we shall insist that new members have the requirements.”
The acting CEO said their stay had no legal implications to the fund.
He said they recently renewed the NSSF license, but has told the fund to recruit qualified members when the tenure of the serving members expired in May 2015.
NSSF board members fail ‘fit and proper’ test