Uganda National Social Security Fund Embraces New Law

4th –November -2011

Members of the Uganda National Social Security Fund (NSSF) will receive their savings at 45 years when the new law governing the pension sector comes in effect.

The new law requires that upon retirement or reaching the age of 45, you get one-third of your money as a lump sum or purchase annuity for life from an insurance company which offers monthly or quarterly payments.

The procedure is in line with the Retirement Benefits Sector Liberalisation Bill which is before Parliament.

Under the current law NSSF pays its members their savings and interest when they clock 55 years. The adjustments have been made after the government discovered that some pensioners are misusing their money.

This Uganda Social Security Fund has assets to a tune of UGX 2.1 Trillion. Most of the investments by the fund are in government debt, while property and shares in listed companies account for 25 percent.

The law which allows participation of private pension funds requires that each scheme gets a new operational license under article 28.

The law also requires that all retirement benefits schemes have separate fund managers, custodians , trustees and administrators wit different names and addresses.

The implementation of the new pension law has is being received in a supportive financial environment which has seen the World Bank approve USD50million policy loan for Uganda to help build a more efficient and deeper financial sector which can support broad based private sector growth.

The first pillar of the program will concentrate on supporting the development of a market for financing including pension system reform, specifically supporting the emergency of a regulated, competitive and sustainable pension industry catering for both mandatory and voluntary pension savings.