Parliament Passes Retirement Benefits Bill

Comments 5495 Views Kampala, Uganda
Parliament has this evening passed the retirement benefits bill into law. The bill seeks to establish an independent regulatory body to manage the affairs of the sector.

The body will be called the Uganda Retirement Benefits Regulatory Authority. The body is expected to regulate the establishment, management and operation of the retirement benefits schemes in Uganda in both private and private sectors.

The Uganda Retirement Benefits Regulatory Authority will become operational three months after the Act has come into force.

The authority, once operational, will supervise institutions, which provide retirement benefits products and services as well as to protect the interests of members and beneficiaries of retirement benefits schemes.

Uganda Retirement Benefits Regulatory Authority, which will be headed by a Chief Executive Officer, will be mandated to license or revoke the license of custodians, trustees, administrators and fund managers of various retirement benefits schemes.

Any investment of surplus money by the regulatory body will be conducted in consultation with the Minister of Finance. Government through parliament shall provide funds of the body.

An employer, who fails to remit the contributions within the prescribed time, commits an offense and is liable to make the remittance already due. The employer will also be charged a fine more than 2% of the total contribution that remains unpaid for each month.

Any employee of the Authority who commits an offense by misusing any information obtained or colludes with any trustees, custodian, administrator, funds manager or other public officer will
Pay a fine not exceeding 10 million shillings or face imprisonment not exceeding three years.

National Social Security Fund (NSSF) is the only body that manages the retirement benefits of workers. It has a statutory entitlement to receive contributions on a monthly basis from every employer in Uganda.

Fifteen percent of private sector employees' gross salary is credited to the individual's account held by NSSF. Five percent of this is deducted from the employees’ gross salary while the remaining 10 percent is a contribution from the employer.

Workers are only allowed to access the fund after clocking 55 years or their loved ones could access the savings after they have passed on. The Act now awaits presidential ascent.

Another bill still in the offing is the Retirement Benefits Sector Liberalization Bill 2011.T
The bill seeks to end the monopoly of the National Social Security Fund and allows workers who have saved for 10 years to access 30 per cent of their savings to secure a mortgage or a loan for purchasing a residential house from any financial institution.

# # #