Liberalisation will grow social security pie – Byarugaba
Kampala October 13- Opening up Uganda’s pension sector will help bring more people under the social security loop by extending cover to workers currently not covered under the NSSF Act say both the government and leaders of the National Social Security Fund, the sole state sanctioned provident fund in the country.
Speaking during the NSSF Fourth Annual General Meeting this week, junior Finance minister Gabriel Ajedra Gabriel said the government was keen to unlock progress on the stalled Pension Sector Liberalisation Bill under which more players would be allowed into the market and allow fostering more competition.
Liberalising the pension sector would also bring more innovation and open new avenues for investing workers savings he added.
“Currently NSSF invests in fixed income, real estate and equity but venturing into other investments would increase the dividends for the workers. There is need for innovations that will be able to grow these savings further and only a competitive environment would bring about these changes,” Ajedra said.
NSSF Managing Director Richard Byarugaba agreed saying liberalising the sector may open avenues for those who are not yet members of NSSF to save for retirement.
“When the new law comes into force it may attract those who cannot meet the required threshold for them to be contributing members and those who are in informal employment. We foresee huge potential in terms of numbers and this can help us grow the astrolonomical number that we are targeting,” Byarugaba said.
NSSF which grew its asset base to Ushs 6.6 trillion in fiscal 2015/16 owing to increased levels of compliance now at 78 percent from 49 percent in 2010, has set itself a target to reach Ushs20 trillion by 2025. Byarugaba believes this is achievable even with more players in the market.
Currently out of the 15 million Ugandans in employment only 1.5 million are registered with the fund but only 700,000 are contributing actively.
Patrick Byabakama Kaberenge, the Chairman NSS Board of Directors says once people realise the importance of saving, then the compliance levels and member contributions would grow more.