The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT | Uganda’s Retirement Benefits Sector is yet to expand coverage to all working citizens to enable them save for retirement, with confidence and without coercion.
Currently, only 2.8 million Ugandans are covered under a retirement plan, with the majority of them under the mandatory NSSF. Over 80% of Uganda’s estimated workforce of 15 million, are not subscribed to any retirement saving scheme.
One of the challenges is the absence of adequate institutions, products and people offering viable retirement saving solutions to the public. This and other retirement related issues were deliberated on at the inaugural annual pension symposium held on 7th July 2022. The symposium was the climax of URBRA’s 10th anniversary celebrations, which started in May.
Need for Innovation
Reflecting on the last ten years since the establishment of Uganda Retirement Benefits Regulatory Authority (URBRA), one observes that the sector has undergone legislative and regulatory reforms, reflected in the current robust legislative and regulatory framework. However, as Getrude Karugaba said, “good legislation is not enough, it’s more important if the legislation enables the sector achieve its objectives.”
Karugaba was one of the panelists speaking at the symposium, where the theme was: “rethinking the scope of retirement benefits for old age security”
Karugaba implored URBRA to encourage further innovation, using the Authority’s regulatory mandate. “The Regulator can think about creating “sandboxes” where players in the market are allowed to try and test products and then implement,” she suggested. She particularly pointed out the new risk-based supervision system, which will hopefully translate into a risk appetite to encourage players in the private sector to be innovative.
Richard Byarugaba, NSSF Managing Director additionally stressed the need for innovation in the sector. “URBRA needs to help schemes come up with new ideas so as to give consumers an opportunity to save for other needs besides retirement and also create a more conducive environment that supports players in the market to be innovative.”
Yet another proposal to enhance innovation, was fronted by Gautam Bhardwaj, Co-founder PinBox Solutions, who was also a panelist at the symposium.
“There is need to optimize retirement outcomes for salaried workers with pension benefits, expand mandatory coverage for excluded Small and Medium Sized Enterprise employees and increase tax funded social pensions that can cover those that cannot save and are already old,” he proposed.
He proposed models for stakeholders to build micropension mass market through a direct-to-client model where an individual uses WhatsApp, USSD code to manage a portable pension, insurance and savings account. He also proposed the Gift-a-pension model where households open accounts for their domestic assistants and family members.
According to Bhardwaj, an attractive, integrated product basket would include micro pension-simple and flexible long-term savings for old age, liquid saving which includes micro-investments for short term goals and emergencies; flexible, portable solution where each person is free to save per their own capacity with no penalties for missed contributions.
The account moves with the worker through changes in jobs or locations over time.
While URBRA celebrates 10 years, reflecting on the institution’s journey and successes, there’s need to widen the scope of long term saving to cover members of the public both in the private and public sector. looking to innovations and technology to attract the public towards saving for retirement.
