Kampala- The debate on Retirement Benefits Sector Bill 2011 has been resurrected with key players saying it should be reconsidered by Parliament.
The players argue that it is an important policy that will lead to development of the pension sector.
During a Financial Markets Development Committee forum in Kampala on Tuesday, key players, said that opening up the sector was the right way to go and Uganda must not shy away from it.
Mr Simon Rutega, the chairman of Financial Markets Development Committee, said the pension reforms have over the years revolutionised the pension systems in a number of countries and have increased returns on savers’ money.
“At best, the new pension reforms can work to increase returns to pension savings, and may also facilitate economic growth by creating large pools of investment capital,” he said.
The reform, he said, should be fast-tracked because they are beneficial to savers and development of the country.
The liberalisation of the pension sector in Uganda has been perceived by many people as a plan to kill National Social Security Fund.
However, the plan seeks to create a pool of pension funds with the view of giving savers alternatives.
Mr Martin Nsubuga, the director supervision at Uganda Retirement Benefits Regulatory Authority, said the draft Bill in Parliament remains relevant and it should not be trashed because it has many important guidelines.
“For instance the draft [Bill] advocates for expanding of coverage of social security in the country. NSSF currently covers around 50 per cent. So opening the sector to other players will bring in more players,” he said.
According to Mr Keith Kayegira, the Capital Markets Authority chief executive officer, the draft Bill should be reconsidered because reforming the pension sector is necessary.
The Bill, he said, should be passed for the country to have long term development finance as well as give government an opportunity to access low cost debt to finance strategic development projects.
“As long as government continues to borrow in double digit from the domestic market the cost of borrowing will remain higher,” he said.
The meeting attracted participants from Ministry of Finance, Bank of Uganda and the private sector.
The Ministry of Gender, among others are spearing a move that will maintain NSSF as the only mandatory saving scheme.
Mr Usher Wilson Owere, the chairman of National Organisation of Trade Unions, said they, as workers’ representatives, have a problem with opening up the sector.
“We have the problem of capital flights because of the liberalisation of the economy that has been done by government. There are policy issues that must be put in place before opening up the pension sector,” he said, adding that the reforms must be beneficial to workers.
Mr Stephen Kaboyo, the Alpha Capital managing director, said the process will require to go through a number of stages before it is implemented.
“It is a process that goes in stages that need the participation of the all the interested parties,” he said.