Comment — There was a time when the retirement benefits sector in Uganda was defined by gross mismanagement, lack of transparency and accountability, outright corruption and brazen embezzlement of savers' money. The establishment of a Sector Regulator since 2011, has provided a foundation for continued improvement in scheme administration, governance and investments.
On September 26th 2011, the Uganda Retirement Benefits Regulatory Authority (URBRA) Act was enacted. This followed a process of major sector reforms, which had been necessitated by the prevailing mismanagement and scandals in retirement benefits schemes at the time. Thus, the Government established a regulator, with the primary objective of protecting members' funds, improving efficiency, and expanding the scope of pension provision to ensure adequate, affordable and sustainable retirement benefits to overcome old-age poverty.
๐จ๐ด๐ฎ๐ป๐ฑ๐ฎ ๐ฅ๐ฒ๐๐ถ๐ฟ๐ฒ๐บ๐ฒ๐ป๐ ๐๐ฒ๐ป๐ฒ๐ณ๐ถ๐๐ ๐ฅ๐ฒ๐ด๐๐น๐ฎ๐๐ผ๐ฟ๐ ๐๐๐๐ต๐ผ๐ฟ๐ถ๐๐ ๐ฐ๐ฒ๐น๐ฒ๐ฏ๐ฟ๐ฎ๐๐ฒ๐ ๐ญ๐ฌ ๐๐ฒ๐ฎ๐ฟ๐ ๐ผ๐ณ ๐๐ฒ๐ฟ๐๐ถ๐ฐ๐ฒ.#UrbraAt10 pic.twitter.com/Hz5hBzboox
-- Government of Uganda (@GovUganda) July 7, 2022
Transparency and accountability were at the heart of the URBRA Act. Apart from setting out a clear process of how schemes are established and governed, the Act stipulates the standards for appointing trustees, custodians, fund managers and administrators. The law also clearly stipulates how funds should be collected, banked, invested or spent. Above all, the law puts members' interest at the centre of all processes.
URBRA has since developed systems and capabilities to effectively regulate and supervise the sector. One of the key regulations introduced addresses the management and operation of Retirement Benefits Schemes. According to the regulations, Trustees are required to develop and maintain comprehensive policies regarding member information, communication, and education. These policies prescribe the communication tools and processes including: Annual General meetings (AGMs); Member Information Handbooks; Annual (or more frequent) benefits statements; Annual report to members; Regular Newsletters; and periodic townhall meetings.
The AGM is a specifically important information-sharing platform and a key indicator of transparency and accountability. Trustees are required by law to give members sufficient notice prior to the AGM. URBRA Regulations also require scheme Trustees, to provide the members and beneficiaries with: information about changes in the trust deed and rules of the scheme; information about changes in the benefits and contributions structure of the scheme; a report about the remuneration and performance of Trustees; a report about the costs and performance of every service provider engaged by the scheme; a report of the audited accounts; a report about the scheme investments; any other information requested by the members. Availing such information to members raises their confidence and reassures them that their funds are safe and prudently invested.
Over the past ten years, there has been increased compliance with the regulations concerning AGMs. Where non-compliance is observed, the Regulator intervenes to analyse the impediments and work with the scheme to resolve all issues. Member participation in AGMs has improved greatly in the last two years, enabled by technology. Faced with the Covid19 pandemic, many schemes were unable to hold physical AGMs and they had to adapt to the new normal of engaging stakeholders online. URBRA developed guidelines for the conduct of online AGMs and schemes quickly latched on.
Reflecting on all these developments brings to the fore, this year's National Social Security Fund (NSSF) Annual Members Meeting, 27th September 2022. NSSF has been exemplary in using technology to mobilise members to participate in the AGM. The meeting will be held virtually, and has been promoted on various communication platforms for nearly a month - giving members ample time to register and prepare.
We are just a few hours away from the 10th Annual Members' Meeting. Share any questions you would like the panel to answer in the comment section. #AMM2022 pic.twitter.com/gEBpoiMqlz
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-- NSSF Uganda (@nssfug) September 26, 2022
More notably, NSSF has declared that this Annual Members' Meeting will mark a decade of transparency, growth and innovation - perfectly aligned with ten years since the establishment of the legal and regulatory framework and the issuance of regulations to enhance scheme governance. Indeed, NSSF Board, Management and savers deserve the accolades because they have come a long way! For over 25 years since establishment in 1985, the fund did not hold AGMs for its members.
Saving for retirement is an important and long-term commitment. Savers need assurance that their lifelong savings are safe and secure. There is no better way to give savers confidence than upholding the principles of transparency, accountability and good governance. It is therefore reassuring to observe that Scheme AGMs are now standard practice. The next hurdle is how to sustain member interest and meaningful participation in the AGMs.
