The full liberalization of Uganda’s pension sector has suffered another setback after Government withdrew the Retirement Benefits Sector Liberalisation Bill aka Pension Liberalization Bill, 2011.
State Minister for Planning, David Bahati Wednesday told Parliament that Finance Ministry needs more time to harmonise with the workers before consideration of the law.
“We are proposing to withdraw this Bill because we still have a number of issues to reconcile with the sector. This Bill touches one of the sectors that protect the contributions of workers in NSSF. During the formulation, we think it is important that we consult with the workers and come back to the House when we are properly organized,” Bahati explained.
It should be noted that while tabling the Bill in 2011, the Finance Ministry argued that the Bill was aimed at providing for liberalization of the retirement benefits sector as well as provide for fair competition among licensed retirement benefits schemes for mandatory contributions.
The Bill also seeks to provide for mandatory contribution and benefits as well as provide for voluntary contributions and voluntary schemes; to regulate occupational retirement benefits schemes; to provide for licensing of umbrella retirement benefits schemes.
Government also argued that that the Legislation would provide for the portability and transfer of accrued benefits, to provide for innovation of new retirement products and services.
The Bill also highlights in Section 22 that a member who would have contributed for at least ten years is eligible for midterm access of benefits for securing a mortgage or a loan for acquiring a residential house from any institution and on such terms as may be prescribed in regulations made under this Act and the Uganda Retirement Benefits Regulatory Authority Act, 2011.
Section 9 of the Bill provided for mandatory registration and contribution to a licensed retirement benefits scheme where every employee in the formal sector shall register with a licensed retirement benefits scheme of his or her choice and shall make regular contributions to the retirement benefits scheme in accordance with this Act and regulations made under this Act.