THE RETIREMENT BENEFITS SECTOR LIBERALISATION BILL,
2011
_________
ARRANGEMENT OF CLAUSES
PART I—PRELIMINARY
Clause
1. Commencement
2. Interpretation
PART II—LIBERALISATION OF THE RETIREMENT BENEFITS SECTOR
3. Liberalisation of the retirement benefits sector
4. Minimum requirements for operating retirement benefit schemes
5. Scheme fund
6. Occupational retirement benefits scheme
7. Formation of umbrella retirement benefits scheme
8. Voluntary scheme established by self employed persons or persons
in the informal sector
PART III—MANDATORY REGISTRATION AND CONTRIBUTION
Mandatory registration and contribution
9. Mandatory registration and contribution
10. Voluntary contributions
11. Portability and transfer of accrued benefits
12. Rate of mandatory contribution
13. Remittance of contribution
Retirement savings account
14. Retirement savings account
15. Retirement Benefits Identification number
16. Crediting of retirement savings account and records of accounts
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
Clause
PART IV—BENEFITS
17. Mandatory benefits
18. Optional benefits
19. Modification of benefits
20. Innovation of retirement benefits products and services
PART V—ACCESSING OF BENEFITS
Accessing of benefits
21. Entitlement to receive benefits as and when due
22. Mid term access of benefits
23. Members entitled to age benefits
24. Access of voluntary contributions
25. Survivor’s benefit
26. Invalidity benefit
27. Emigration grant
28. Accessing of age benefit
29. Lump sum and annuity arrangement for schemes receiving
mandatory contributions
30. Existing members to choose mode of payment of age benefit
31. Ceasing of membership and mandatory contributions
32. Closing of retirement savings account
33. Ledger of unallocated and unclaimed balances
Protection of member’s benefits
34. Computation of benefits
35. Exception to section 70 of the Uganda Retirement Benefits
Regulatory Authority Act, 2011
36. Tax exemption
37. Measures to protect retirement savings
38. Schemes Depository Fund
39. Authority to prescribe minimum cash reserve balances
PART VI—MISCELLEANEOUS
40. Regulations
41. Amendment of Schedules
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Clause
42. Guidelines
43. Offences and penalties
44. Recovery of civil penalties
45. Enforcing compliance
46. Exchange of information with other regulators
PART VII—REPEALS, SAVINGS AND TRANSITION
Repeal and savings
47. Repeal of the National Social Security Fund Act Cap.222
48. Effect of the repeal of Cap.222 on the status quo of the National
Social Security Fund
Transitional provisions
49. Preservation of funds under the National Social Security Fund
50. Contributions by existing members of the National Social Security
Fund
51. Transfer from National Social Security Fund to any other
retirement benefits Schemes
52. Statutory Instrument to deal with transition matters
53. Existing investments by voluntary schemes
54. Schemes to disclose transition matters
SCHEDULES
SCHEDULE 1 Currency Point
SCHEDULE 2 Guidelines for operating retirement benefits schemes in
the liberalised retirenement benefits sector
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
A Bill for an Act
ENTITLED
THE RETIREMENT BENEFITS SECTOR
LIBERALISATION ACT, 2011.
An Act to provide for liberalization of the retirement benefits
sector; to provide for fair competition among licensed retirement
benefits schemes for mandatory contributions; to provide for
mandatory contribution and benefits;to provide for voluntary
contributions and voluntary schemes; to regulate occupational
retirement benefits schemes; to provide for licensing of umbrella
retirement benefits schemes; to provide for the portability and
transfer of accrued benefits, to provide for innovation of new
retirement products and services; to repeal the National Social
Security Fund Act Cap 222 and for related matters.
BE IT ENACTED by Parliament as follows:
PART I—PRELIMINARY
1. Commencement
This Act shall come into force on a date appointed by the Minister by
statutory instrument; and different dates may be appointed for the
commencement of different provisions.
2. Interpretation
In this Act, unless the context otherwise requires—
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“accrued benefit” means the amount of each scheme member’s
beneficial interest in the retirement benefits scheme at any
time, including sums derived from contributions made in
respect of that member, together with the income or profits
arising from any investments of the scheme, and taking into
account any losses of the scheme and any previous
distributions from the scheme;
“active member” means a member of a retirement benefits
scheme who is currently accruing benefits under a
retirement benefits scheme;
“actuarial valuation” means a valuation carried out by an actuary
on a regular basis, in particular to test future funding or
current solvency of the value of the pension fund’s assets
with its liabilities;
“administrator” has the meaning given to it under the Uganda
Retirement Benefits Regulatory Authority Act;
“annuity” means a schedule of regular payments made to a
member of a retirement benefits scheme or to his or her
beneficiary according to the terms of payment of the
scheme;
“Authority” means the Uganda Retirement Benefits Regulatory
Authority established under section 2 of the Uganda
Retirement Benefits Regulatory Authority Act, 2011;
“beneficiary” means a person designated by a member of a
retirement benefits scheme, or by the rules of the scheme to
benefit under the scheme;
“benefit” means a payment made to a member in accordance
with this Act;
“Board of trustees” means the board of trustees of a retirement
benefits scheme;
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“contributory scheme” means a retirement benefits scheme to
which an employer or an employee or both contribute;
“currency point” has the meaning given to it under Schedule 1;
“custodian” has the meaning given to it under the Uganda
Retirement Benefits Regulatory Authority Act, 2011;
“eligible access age” means the age prescribed by the Authority
for accessing age benefits;
“employee” means any person who has entered into a contract
of service or an apprenticeship contract, including, without
limitation, any person who is employed by the Government
of Uganda, the Uganda Public Service, a local authority or
a parastatal organisation and a member of the Uganda
People’s Defence Forces;
“employer” means any person or group of persons, including a
company or corporation, a public, regional or local
authority, a governing body of an unincorporated
association, a partnership, parastatal organisation or other
institution or organisation whatsoever, for whom an
employee works or has worked, or normally worked or
sought to work, under a contract of service, and includes
the heirs, successors, assignees and transferors of any
person or group of persons for whom an employee has
worked or normally work;
“formal sector” means trade, profession, undertaking, operation
or establishment whether public, co-operative or private
which is incorporated or registered, and is normally subject
to regulation;
“fund manager” has the meaning given to it under the Uganda
Retirement Benefits Regulatory Authority Act, 2011;
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“informal sector” refers to production units which engage in
legitimate economic activity and are normally operated
without organisational structures and with little or no
division between labour and capital;
“insurance company” means an insurance company licensed
under the Insurance Act;
“licensed retirement benefits scheme” means a retirement
benefits scheme licensed under the Uganda Retirement
Benefits Regulatory Authority Act, 2011;
“mandatory contributions” means contributions which an
individual is mandated by law to contribute;
“medical practitioner” means a medical practitioner registered
under the Medical and Dental Practitioners Act;
“member” means a person who is admitted to the membership of
a retirement benefits scheme, who makes contributions, or
in respect of whom contributions are made to a retirement
benefits scheme or who is accruing benefits under the
scheme;
“Minister” means the Minister responsible for finance;
“occupational retirement benefits scheme” means a retirement
benefits scheme which is linked to an employment or
professional relationship between the member and the
sponsor, and which may be established by employers or
groups of employers, labour or professional associations,
jointly or separately;
“retirement benefits scheme” has the meaning given to it under
the Uganda Retirement Benefits Regulatory Authority Act,
2011;
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“scheme” means a retirement benefits scheme;
“scheme fund” means an investment fund within the retirement
benefits scheme which is intended to accumulate during an
individual working life from contributions and investment
income for purposes of providing income on retirement in
accordance with this Act;
“scheme rules” means the rules specifically governing the
constitution, administration and management of a
retirement benefits scheme;
“sponsor” has the meaning given to it under the Uganda
Retirement Benefits Regulatory Authority Act, 2011;
“trustee” has the meaning given to it under the Uganda
Retirement Benefits Regulatory Authority Act, 2011;
“umbrella retirement benefits scheme” means a retirement
benefits scheme formed under section 7;
“voluntary contribution” means a contribution which an
individual is not obliged by law to contribute;
“wages” means remuneration or earnings, however designated
or calculated, capable of being expressed in terms of money
and are fixed by mutual agreement or by national laws or
regulations which are payable under an oral or written
contract of service for work done or to be done, or for
services rendered; if no deductions were made, whether in
pursuance of any law requiring or permitting any deduction
or otherwise.
PART II—LIBERALISATION OF THE RETIREMENT BENEFITS SECTOR
3. Liberalisation of the retirement benefits sector
(1) A retirement benefit schemes which is licensed to receive
mandatory contributions may operate and compete for mandatory
contributions in an open market in accordance with this Act.
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(2) A retirement benefit schemes which is licensed to receive
mandatory contributions shall hold all the funds and assets of the
scheme in trust on behalf of the general public.
(3) A retirement benefit schemes which is licensed to receive
mandatory contributions shall be audited at least once annually by the
Auditor General or an auditor appointed by the Auditor General, and
the audit reports shall be submitted to Parliament.
4. Minimum requirements for operating a retirement benefits
schemes
(1) The Minister shall, in consultation with the Authority,
prescribe minimum requirements for operating retirement benefits
schemes.
(2) The minimum requirements to be prescribed under
subsection (1) shall include—
(a) the minimum deposit to be maintained by a retirement
benefits scheme receiving mandatory contributions;
(b) a trust deed containing the governance structures of the
retirement benefits scheme and allocation of
responsibilities in the retirement benefits scheme;
(c) a valid insurance cover for the protection against liabilities
that may arise as a result of activities by the retirement
benefits scheme;
(d) a compliance plan submitted by the retirement benefits
scheme and in particular the scheme’s internal
arrangements for complying with this Act and the Uganda
Retirement Benefits Regulatory Authority Act, 2011;
(e) a business plan and a funding policy to ensure adequate
financing of the scheme’s retirement benefits liabilities; and
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(f) any other requirement which the Authority considers
necessary for the purposes of operating a retirement
benefits scheme in a liberalised retirement benefits sector.
5. Scheme fund
(1) There shall be, in respect of every retirement benefits scheme
receiving mandatory contributions, a scheme fund into which all
contributions, investment earnings, income and all other moneys
payable to the scheme under the provisions of this Act shall be paid.
(2) The scheme fund and all moneys in it shall, at all times, be
maintained separately from any other money under the control of the
trustees or the fund managers of the retirement benefits scheme.
6. Occupational retirement benefits scheme
(1) An occupational retirement benefits scheme receiving
mandatory contributions shall—
(a) comply with the requirements under section 4;
(b) be funded to ensure adequate financing of the scheme’s
liabilities; and
(c) apply for a licence in accordance with the Uganda
Retirement Benefits Regulatory Authority Act 2011 and
regulations made under the Act.
(2) Sub section (1) (a) and (b) shall not apply to an occupational
retirement benefits scheme which does not receive mandatory
contributions.
(3) An occupational retirement benefits scheme which does not
receive mandatory contributions shall apply for a licence in
accordance with the Uganda Retirement Benefits Regulatory
Authority Act 2011 and regulations made under the Act.
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7. Formation or joining of umbrella retirement benefits scheme
(1) Two or more retirement benefits schemes may form an
umbrella retirement benefits scheme which shall be licensed by the
Authority in accordance with the Uganda Retirement Benefits
Regulatory Authority Act 2011 and regulations made there under.
(2) A retirement benefits scheme may join a licensed umbrella
retirement benefits scheme.
(3) Retirement benefits schemes referred to in subsection (1) and
(2) shall setup a member committee to present the members’ interests
to the board of trustees of the umbrella retirement benefits scheme.
(4) An umbrella retirement benefits scheme shall—
(a) manage the retirement benefits of its members in
accordance with this Act and the Uganda Retirement
Benefits Regulatory Authority Act, 2011 and regulations
made under the Acts;
(b) have a special set of scheme rules which outline the
benefits structure of its members ;and
(c) comply with the requirements under section 4.
8. Voluntary schemes established by self employed persons or
persons in the informal sector
(1)A person who is self employed, or a person working in the
informal sector, a group of persons or an association of individuals
in the informal sector may form or join a voluntary retirement
benefits scheme into which they may make contributions.
(2) A retirement benefits scheme established in subsection (1)
shall be licensed by the Authority in accordance with the Uganda
Retirement Benefits Regulatory Authority Act 2011 and Regulations
made there under.
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PART III—MANDATORY REGISTRATION AND CONTRIBUTION
Mandatory registration and contribution
9. Mandatory registration and contribution to a licensed
retirement benefits scheme
(1) 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.
(2) Every employer in the formal sector, irrespective of the
number of employees, shall make regular contributions for his or her
employees to a licensed retirement benefits scheme in accordance
with this Act and regulations made under this Act.
(3) An employer shall deduct a monthly contribution from each
employee’s wages at source and remit the amount comprising of the
employee and the employer’s contribution to a licensed retirement
benefits scheme chosen by the employee under subsection (1), before
the fifteenth day of the following month.
(4) Every employer in the formal sector shall ensure that every
employee is registered with a licensed retirement benefits scheme of
the employee’s choice.
(5) Where an employee fails to choose a scheme within three
months after commencement of employment, the employer may
choose a scheme for the employee from a list of schemes prequalified
by the Authority.
10. Voluntary contributions
(1) An employee or employer in the informal sector or a self
employed person may make voluntary contributions to a licensed
retirement benefits scheme of his or her choice in accordance with
this Act and regulations made under this Act.
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(2) An employee in the formal sector may, in addition to the
mandatory contributions made by him or her, and his or her employer
under section 9, make voluntary contributions to a licensed retirement
benefits scheme of his or her choice.
11. Portability and transfer of accrued benefits
(1) A member may transfer his or her accrued benefits from one
retirement benefits scheme to any other licensed scheme in Uganda
or the East African Community, in accordance with this Act and
Regulations made under this Act.
(2) A member shall give his or her employer notice in writing,
of his or her intention to have his or her accrued benefits transferred
from one retirement benefits scheme to another scheme.
(3) The employer shall, upon receipt of the notice under
subsection (2), give the Authority and the trustee of the retirement
benefits scheme from which the accrued benefits are transferred,
notice in writing, at least sixty days before the transfer is made.
(4) The Authority shall by Statutory Instrument prescribe
procedures for transferring accrued benefits to any other country out
of East Africa.
(5) The accrued benefit in a—
(a) defined contribution retirement benefits scheme refer to the
amount of each scheme member’s beneficial interest in the
retirement benefits scheme at any time, including sums
derived from contributions made in respect of that member,
together with the income or profits arising from any
investments of the scheme, and taking into account any
losses of the scheme and any previous distributions from
the scheme; and
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(b) a defined benefits scheme refers to the actuarial value of
the accrued retirement benefits except that, the amount in
respect of benefits arising from mandatory contributions
shall not be less that the accumulated amount of those
mandatory contributions plus interest from time to time as
determined by the trustees on the advice of the scheme
actuary.
12. Rate of mandatory contribution
(1) Subject to the approval of the Authority, the mandatory
contribution made under section 9 shall be—
(a) a minimum of five per cent of the employee’s wages by the
employee; and
(b) a minimum of ten per cent of the employee’s wages by the
employer.
(2) Notwithstanding subsection (1), an employer may opt to bear
the full burden of the contribution except that in such a case the
employer’s contribution shall not be less than 15% of the wages of the
employee.
(3) The Minister may, by Statutory Instrument, in consultation
with the Authority vary the rates of contribution mentioned in
subsection (1).
(4) The rate of voluntary contributions shall be agreed upon
between the employer and the employee.
13. Remittance of contribution
(1) An employer shall remit the contribution in respect of his or
her employee to a licensed retirement benefits scheme before the
fifteenth day of the following month.
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(2) An employer who fails to remit the contributions within the
prescribed time, commits an offence and is liable to make the
remittance already due, and in addition pay a fine of not less than ten
percent of the total contribution that remains unpaid for each month
or part of each month during which the default continues.
(3) The amount of the penalty under subsection (2) shall be
recoverable as a civil debt owing to the profit and loss account of the
scheme.
(4) The remittance referred to in subsection (2) and the interest
arising from the remittance shall be paid to the member’s retirement
savings account.
(5) A retirement benefits scheme may apply to the Authority to
waive the penalty imposed under sub section (2) if in the opinion of
the scheme, an employer has reasonable cause for failing to make the
remittance.
Retirement savings account
14. Retirement savings account
(1) The Board of trustees of a retirement benefits scheme shall
ensure that a member’s retirement savings account is opened and
maintained in the names of every employee who registers with the
scheme.
(2)There shall be paid into a member’s retirement savings
account, all mandatory and voluntary contributions and interest on
them.
(3) There shall be paid out of the member’s retirement savings
account any benefits and refunds to or in respect of the member and
all prescribed fees payable by the member in accordance with this Act
and regulations made under the Act.
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(4) An employee shall as soon as practicable, notify his or her
employer of the retirement benefits scheme chosen by him or her and
the identity of the retirement savings account opened under
subsection (1).
(5) A retirement benefits scheme shall make available to a
member an annual statement of the member’s account which shall be
sent to the member’s current address or the last known address of the
member, except that where the member fails to provide an address,
the retirement benefits scheme shall not be under any obligation to
send a statement of account to that member.
(6) Notwithstanding subsection (5), a member may on request,
upon payment of a prescribed fee, be issued with a statement of his or
her account, in accordance with the regulations made under this Act.
(7) The mandatory and voluntary contributions of a member
shall be maintained on separate accounts.
15. Retirement Benefits Identification number
(1) A retirement benefits scheme shall in consultation with the
Authority, issue a retirement benefits identification number to every
person who opens a retirement savings account with the scheme.
(2) The retirement benefits identification number shall not be
transferable from one member to another and shall be used by each
member throughout his or her working life for the purposes of this
Act.
(3) For avoidance of doubt, a member who transfers from one
scheme to another shall maintain the same retirement benefits
identification number.
(4) A member who fraudulently acquires more than one
retirement benefits identification number commits an offence and is
liable on conviction to a fine not exceeding five hundred currency
points or imprisonment for a term not exceeding three years or both.
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(5) A retirement benefits scheme which issues more than one
retirement benefits identification number to a member commits an
offence and is liable to a fine not exceeding one thousand currency
points.
(6) The Authority shall establish and maintain a central data base
system containing a record of names of members and retirement
benefits identification numbers issued by all licensed schemes.
(7) A member may use the same retirement benefits number for
both mandatory contributions and voluntary contributions.
16. Crediting of retirement savings account and records of
accounts
(1) A custodian of a retirement benefits scheme shall, upon
receipt of the member’s contribution remitted under section 13, notify
the administrator of the scheme who shall keep a record of the
member’s retirement savings account indicating the contribution
made in respect of that member.
(2) A member shall not have access to his or her retirement
savings account nor have any dealing with the custodian as regards
the retirement savings account except through an administrator of the
retirement benefits scheme.
(3) A retirement benefits scheme shall maintain a record of all
retirement savings accounts for its members.
PART IV—BENEFITS
17. Mandatory benefits
A retirement benefits scheme receiving mandatory contributions shall
offer mandatory benefits including—
(a) age benefits;
(b) survivor’s benefits;
(c) invalidity benefits, and
(d) any other benefit as the Authority may approve.
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18. Optional benefits
(1) A retirement benefits scheme may offer optional benefits
which may include—
(a) medical and maternity benefit;
(b) unemployment benefit;
(c) education benefit;
(d) home ownership benefit;
(e) funeral benefit; or
(f) any other benefit as the Authority may approve.
(2) Optional benefits may be funded from voluntary
contributions.
19. Modification of mandatory benefits
The Authority may modify the categories of mandatory benefits
under this Act by adding or removing a benefit.
20. Innovation of retirement benefits products and services
A retirement benefits scheme may, with the approval of the Authority,
innovate retirement benefits products and services.
PART V—ACCESSING OF BENEFITS
Accessing of benefits
21. Entitlement to receive benefits as and when due
(1) A member is entitled to receive his or her benefits whenever
they are due.
(2) A claimant for a benefit under this Act shall, in support of his
or her claim submit such evidence and documents as the retirement
benefits scheme considers necessary or proper, in a form approved by
the Authority.
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22. Mid-term access of benefits
(1) A member who has 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.
(2) A member who has not accessed his or her benefit under
subsection (1) may access a midterm benefit if the member is forty
five years and has contributed for at least ten years.
(3) Mid-term access of benefits shall be allowed up to 30% of
the available accrued benefits arising from mandatory contributions
and interest thereof.
23. Members entitled to age benefit
(1) A member is entitled to an age benefit if he or she attains the
eligible access age prescribed by the Authority.
(2) Where the date of birth of a member is in doubt, and if such
date is not proved by any written record used for official purposes, the
retirement benefits scheme may, for the purpose of any claim under
this Act, accept the date of birth declared at the time of registration of
that member or any document produced by the member and verified
by the scheme as proof of the member’s age.
24. Access of voluntary contributions
(1) A member shall access his or her voluntary contributions on
terms agreed upon by the member and the scheme.
(2) The terms agreed upon under subsection (1) shall be
prescribed in the scheme rules and trust deed.
(3) For avoidance of doubt, section 68(1) (d) and (e) of the
Uganda Retirement Benefits Regulatory Authority Act 2011 shall not
apply to voluntary contributions.
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25. Survivor’s benefit
(1) Upon the death of a member, the dependant relatives of a
member are entitled to a survivor’s benefit in accordance with the
Succession Act Cap 162.
(2) Notwithstanding subsection (1), the survivor’s benefit may
be paid to any other beneficiary designated by the member to receive
the benefit in accordance with this Act and the scheme rules.
26. Invalidity benefit
(1) A member of a retirement benefits scheme is entitled to
receive an invalidity benefit.
(2) The scheme shall appoint a medical practitioner to examine
the condition of a member and advise the Board of trustees on the
nature and degree of invalidity or incapacity for the purposes of this
Act.
(3) A member who is dissatisfied with the decision of the
medical practitioner appointed by the scheme may appeal to the
Authority.
(4) A member who is dissatisfied with the decision of the
Authority under subsection (3) may appeal to the Retirement Benefits
Appeals Tribunal.
27. Emigration grant
(1) A member who permanently emigrates from Uganda to a
country with which no reciprocal arrangement exists, shall, if
contributions have been paid under this Act in respect of that member
to the scheme for a period of three years, be entitled to the full value
of his or her accrued benefits and any interest arising from the
benefits.
(2) Where a member emigrates from Uganda before the period
referred to under subsection (1) he or she shall be entitled only to his
or her own contribution, and any balance standing from the value of
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
the member’s accrued benefits shall be paid to the Authority after
deducting the cost of collection and management of the member’s
account.
(3)Where a member under subsection (2) belongs to the East
African Community, he or she shall be eligible to receive the full
value of his or her accrued benefits as an emigration grant.
28. Accessing of age benefit
A member may access his or her age benefit in form of—
(a) a lumpsum payment;
(b) a programmed withdrawal including income draw down;
(c) purchasing an annuity for life from an insurance company;
or
(d) any other method as the Authority may approve.
29. Lump sum and annuity arrangements for schemes receiving
mandatory contributions
(1) When a member who makes mandatory contributions
qualifies for an age benefit, one-third of his or her accrued benefits
may be paid as a lump sum.
(2) The balance arising out of subsection (1) shall—
(a) in case of a defined contribution scheme, be used to
purchase an annuity from an insurance company to
guarantee a regular lifetime income draw down for the
beneficiary or programmed withdrawals as approved by the
Authority; or
(b) in case of a defined benefits scheme, the annuity may be in
form of a direct pension.
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(3) Where the amount in subsection (1) is a trivial amount which
is not sufficient to purchase an annuity, a member may withdraw a
one hundred percent lump sum of his or her accrued benefits.
(4) In this section—
(a) “income draw down” refers to an option which allows a
member to draw an income from his or her retirement
savings while leaving the remainder invested by the scheme
as the member waits for a more favourable environment for
purchasing an annuity;
(b) “trivial amount” refers to an amount determined by the
Authority by Statutory Instrument.
30 Existing members to choose mode of payment of age benefit
Notwithstanding section 29, a member who, upon coming into force
of this Act, has been making mandatory contributions or in respect of
whom mandatory contributions have been made under any existing
law or pension arrangement, may choose to access his or her age
benefits in accordance with the arrangement existing prior to coming
into force of this Act or to access his or her benefits in accordance
with this Act.
31. Ceasing of membership and mandatory contributions
(1) An employee shall cease to be a member of a retirement
benefits scheme in accordance with the scheme rules.
(2) Payment of mandatory contributions shall cease upon—
(a) attaining the eligible retirement age;
(b) death of a member;
(c) permanent emigration;
(d) permanent invalidity;
(e) occurrence of any event as determined by the Authority.
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32. Closing of retirement savings account
A member’s retirement savings account shall be closed when he or
she ceases to be a member in accordance with section 31and any
accrued benefits have been disposed off in accordance with this Act.
33. Ledger of unallocated or unclaimed balances
(1) A retirement benefits scheme shall open and maintain a
ledger of unallocated balances into which shall be accounted-
(a) any contributions which cannot be allocated to the
retirement savings account of a member because the
member cannot be identified; and
(b) any interest and income arising from the contribution
referred to in paragraph (a).
(2) Upon the expiry of 10 years after the contributions have been
recorded in the ledger of un claimed balances, if the retirement
benefits scheme cannot identify the member to whom the
contribution referred to in subsection (1) belongs, the scheme shall
transfer the un allocated balance to the Authority.
(3) Any benefits which remain unclaimed after five years from
when the benefits become payable or due, shall be transferred to a
separate ledger and published in a newspaper of wide circulation.
(4) If five years elapse after the first publication in subsection (3)
and such benefits remain un claimed, a final publication shall be
posted in a news paper of wide circulation giving a notice of six
months after which the benefits shall be transferred to the Authority.
Protection of member’s benefits
34. Computation of benefits
Any benefit granted under this Act shall be computed basing on
transparent, comparable, modern and effective risk management
standards as determined by the Authority.
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35. Exception to section 70 of the Uganda Retirement Benefits
Regulatory Authority Act, 2011
Section 70 of the Uganda Retirement Benefits Regulatory Authority
Act, 2011 shall not apply where a member’s accrued benefits are been
used as collateral in a manner permitted under section 68(2) (a) of the
Uganda Retirement Benefits Regulatory Authority Act, 2011.
36. Tax exemption
(1) Notwithstanding any provision in any written law to the
contrary, income tax shall not be charged on—
(a) mandatory contributions;
(b) an age benefit;
(c) a survivor benefit;
(d) an invalidity benefit;
(e) a benefit paid out of taxed contributions;
(f) voluntary contributions up to 30% of the wages of a
member in the formal sector;
(g) voluntary contributions up to 30% of the income of a
person in the informal sector or a self employed person.
(2) For the avoidance of doubt, notwithstanding sub-section (1),
income tax shall be chargeable on any voluntary contribution which
is over and above the threshold prescribed in sub-section 1(f) and (g).
37. Measures to protect retirement savings
(1) The Authority shall ensure that the following measures are
taken to protect retirement savings—
(a) a strong risk management framework is established by each
scheme and approved by the Authority;
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(b) each scheme deposits a prescribed minimum reserve
balance into the Schemes Depository Fund established
under section 38.
(2) Where the measures in subsection (1) are exhausted and
there is still a fiscal liability to a scheme receiving mandatory
contributions, the Government shall intervene.
38. Schemes Depository Fund
The Authority shall, in consultation with the Minister, establish a
Schemes Depository Fund into which each retirement benefits
scheme shall deposit a prescribed minimum cash reserve balance
which will be used to offset the liabilities of the scheme for purposes
of section 37.
39. Authority to prescribed minimum cash reserve balances
(1) The Authority may prescribe for each retirement benefits
schemes or an umbrella retirement benefits scheme the minimum
cash reserve balances inclusive of vault cash which may be required
to be maintained in the form of deposits in the fund or any other
method laid down by the Authority.
(2) The Authority may prescribe various ratios for different
kinds of liabilities and shall prescribe the methods of computing the
amount of cash reserve balances.
(3) The total amount of the cash reserve balances referred to in
subsection (1) shall not exceed 25 percent of the retirement benefits
scheme’s deposits and other liabilities; but within this overall limit
the Authority may impose incremental reserves up to 100 percent on
any increase of any kind of liability from a date prescribed by the
Authority.
(4) The Authority may impose on a retirement benefits scheme
which fails to maintain the minimum cash reserve balances required
under this section a penalty not exceeding one-tenth of 1 percent per
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
day on the amount of the deficiency for each day during which the
deficiency continues, and the amount of any such penalty may be
recovered by deduction from any balance of, or monies owing to, the
retirement benefits scheme concerned or as a civil debt.
(5) For the purposes of this section, the liabilities of a retirement
benefits scheme means its retirement benefits liabilities payable in
Uganda.
PART VI—MISCELLEANEOUS
40. Regulations
(1) The Minister shall in consultation with the Authority by
statutory instrument, make regulations generally for giving effect to
the provisions of this Act and for its due administration.
(2) Without prejudice to the general effect of subsection (1),
regulations under this section may—
(a) prescribe the standards applicable in a liberalized
retirement benefits sector to ensure fair competition;
(b) prescribe the minimum deposit to be maintained by a
retirement benefits scheme receiving mandatory
contributions to ensure fiscal sustainability of the scheme;
(c) prescribe the nature of benefits payable and the
administrative arrangements for accessing the benefits;
(d) provide for and regulate the computation of benefits, the
manner of making claims for benefits and payment of
benefits;
(e) establish a Schemes Depository Fund into which shall be
deposited and maintained minimum cash reserve balances
made by retirement benefits schemes;
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(f) prescribe the conditions for application for money paid to
one person on behalf of or for the benefit of a beneficiary;
(g) provide for adjustment in amount of benefit and the time
and manner of payment of the benefit;
(h) provide for conversion of a benefit into lump sum and
annuity payment;
(i) make provision for enabling or requiring a person to be
appointed to receive, administer or to exercise under this
Act any right or power on behalf of a person who is unable
for the time being to act for himself or herself;
(j) regulate the manner of payment of contributions;
(k) regulate the refund of contributions paid in error or in
excess of the statutory contribution;
(l) provide for registration of contributing employers and
employees and prescribe the conditions attached to the
registration;
(m) provide for formation and licensing of umbrella retirement
benefits schemes;
(n) prescribe voluntary contributions by a member for whom
mandatory contributions have ceased to be payable and the
manner of calculating those payments;
(o) require any employer or any class of employers to make
provisional deductions;
(p) provide for licensing of occupational retirement benefits
schemes;
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(q) subject to the provisions of this Act and of any other written
law, make provision for the winding up of a retirement
benefits scheme and the transfer of assets of the retirement
benefits scheme upon winding up;
(r) prescribe conditions for regulation of voluntary scheme;
(s) prescribe the forms to be used for the purposes of this Act;
(t) prescribe the fees and other charges payable under this Act;
(u) prescribe the procedure for allocation of social security
numbers and a central registry for all issued social security
numbers;or
(v) any matter or thing required to be prescribed under this Act.
(3) Regulations made under this section may apply to persons of
any class or description and in particular, the regulations may—
(a) who cease to be employed or persons emigrating
permanently out of Uganda;
(b) provide for reciprocal arrangements for payment of
emigration grants; and
(c) prescribe the mode of payment of a benefit, where a benefit
accrues both under this Act and under the Laws of another
country.
(4) Regulations made under this section may, in respect of any
contravention of any of the regulations—
(a) prescribe a penalty of a fine not exceeding one hundred
currency points or imprisonment for a term not exceeding
three years, or both;
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(b) in the case of a continuing contravention, prescribe an
additional penalty not exceeding five hundred currency
points in respect of each day on which the offence
continues; and
(c) prescribe a higher penalty not exceeding one thousand
currency points in respect of a second or subsequent
contravention.
41. Amendment of Schedules
(1) The Minister may, with approval of Cabinet, by Statutory
Instrument, amend Schedule 1.
(2) The Authority may by Statutory Instrument, amend Schedule
2.
42. Guidelines
The Authority may issue guidelines for giving effect to the provisions
of this Act and for its due administration.
43. Offences and penalties
(1) A person who contravenes any provision of this Act commits
an offence and is liable on conviction, to a fine not exceeding one
hundred currency points or imprisonment for a term not exceeding
three years, or both.
(2) A retirement benefits scheme which contravenes any
provision of this Act commits an offence and is liable on conviction
to pay to the Authority a civil penalty of five hundred currency points
in respect of each day on which the offence continues.
(3) Where a sponsor, trustee, administrator or fund manager of a
retirement benefits scheme contravenes or causes a contravention of
any provision of this Act, he or she shall be personally liable to pay
a civil penalty of five hundred currency points in respect of each day
on which the offence continues.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(4) Any person who is a sponsor, trustee, administrator or fund
manager of a retirement benefits scheme, who with intent to defraud
causes loss to a retirement benefits scheme directly or indirectly,
commits an offence and is liable on conviction to a fine not exceeding
one thousand currency points or imprisonment for a term not
exceeding five year or both.
(5) Any person who—
(a) knowingly makes any false statement or false
representation;
(b) for the purpose of obtaining any benefit or in order to evade
payment of the contribution, whether for himself or herself
or for some other person, produces or causes or knowingly
allows to be produced any document or gives or causes to
be given any information which he or she knows to be false
in a material particular;
(c) misrepresents or fails without lawful excuse to disclose any
material fact;
(d) fails without lawful excuse to register or to furnish
particulars required by or under this Act to be furnished;
(e) willfully makes an unauthorised deduction from a wage
payment purporting to be a deduction for an employee’s
retirement benefit;
(f) fails to pay at or within the time prescribed under or by this
Act or the regulations any contributions or payment which
he or she is liable under this Act to pay; or
(g) contravenes in any way any provision of this Act as a result
of which a member’s retirement savings account cannot be
credited with all the contributions or interest due,
commits an offence and is liable to a fine not exceeding one thousand
currency points or to imprisonment for a term not exceeding three
years or both.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
44. Recovery of civil penalties
(1) Before imposing a civil penalty on any retirement benefits
scheme or on a sponsor, trustee, administrator, fund manager of a
retirement benefits scheme or any person under this Act, the
Authority shall, except in the case of an emergency, give to the
retirement benefits scheme or the sponsor, trustee, administrator, fund
manager or person not less than three days notice in writing requiring
the retirement benefits scheme or the sponsor, trustee, administrator
or fund manager of a retirement benefits scheme or person to show
cause why the civil penalty should not be imposed.
(2) Unless special provision is otherwise expressly made for the
purpose in this Act or Regulations made under this Act, where a civil
penalty is imposed under subsection (1), the amount of the civil
penalty shall constitute a debt due to the Authority and the Authority
may—
(a) sue the retirement benefits scheme, a sponsor, trustee,
administrator, fund manager of a retirement benefits
schemes or any person liable for the recovery of the civil
penalty;
(b) direct that any part of the civil penalty which remains
unpaid after a particular period notified to the retirement
benefits scheme and the sponsors or trustees of the
retirement benefits scheme, shall constitute a debt payable
by the sponsor and the trustees of the retirement benefits
scheme specified in the notification; and the Authority is
entitled to sue the sponsor and trustees jointly and severally
for the amount due.
(3) Any amount recoverable under this section which is not paid
shall be paid with interest calculated from the date on which the
payment first became due.
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45. Enforcing compliance
The Authority shall adopt appropriate measure for enforcing
compliance with this Act and the Uganda Retirement Benefits
Regulatory Authority Act, 2011.
46. Exchange of information with other regulators
(1) The Authority may—
(a) in the performance of its functions cooperate or exchange
information with any regulator; or
(b) on request, provide any information to any regulator which
in the opinion of the Authority may assist the regulator in
the performance of its functions.
(2) The Authority shall determine whether the exchange or
provision of information under subsection (1) is consistent with the
performance of its functions, is in the interest of maintaining the
integrity of the retirement benefits sector and in particular, whether
the—
(a) regulator requesting for information carries out similar
functions with the Authority;
(b) information provided will be used in exercising proper
regulatory functions;
(c) regulator requesting for information will provide
comparable assistance to the Authority;
(d) regulator requesting for information is prepared to assist
with the cost of an investigation if necessary ;
(e) assistance is relevant to the regulator for implementing or
enforcing laws and regulations relating to retirement
benefits;
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(f) regulator requesting for information will comply with any
conditions the Authority may impose on the transmission of
information;
(g) regulator requesting for information is able to provide
adequate protection to any confidential information that
may be passed to it;
(h) provision of information or assistance would maintain or
enhance the reputation of the retirement benefits sector; or
(i) criminal proceedings have already been initiated in Uganda
based upon the same facts and against the same persons as
are the subject of the request for information.
(3) In this section “regulator” means any regulatory Authority
established by any written law to perform the functions of regulating
the retirement benefits sector or any related aspects.
PART VII—REPEAL, SAVINGS AND TRANSITION
Repeal and Savings
47. Repeal of the National Social Security Fund Act, Cap. 222
The National Social Security Fund Act, Cap. 222 is repealed.
48. Effect of the repeal of Cap. 222 on the status quo of the
National Social Security Fund
(1) Upon the coming into force of this Act the National Social
Security Fund which was established under the repealed Act shall
cease to be a statutory corporation.
(2) Notwithstanding the general effect of subsection (1), the
National Social Security Fund in existence immediately before the
commencement of this Act shall continue to exist as an irrevocable
trust called National Social Security Fund retirement benefits scheme
subject to the provisions of the Uganda Retirement Benefits
Regulatory Authority Act 2011 and this Act.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(3) All assets vested or held in trust by virtue of the repealed Act
immediately before the commencement of this Act, shall, upon the
commencement of this Act, be deemed to be vested or held in trust by
the National Social Security Fund retirement benefits scheme on the
same terms and conditions existing immediately before the
commencement of this Act.
(4) Any legal instruments made under the repealed Act, shall
remain valid and binding, and shall be deemed to be made under the
this Act, until they are revoked by a statutory instrument made under
this Act.
(5) Any decisions, agreements or contracts made under the
repealed Act, shall in so far as they are not inconsistent with this Act,
remain valid and binding in accordance with the terms under which
they were made.
(6) Any action, arbitration, proceedings or cause of action
which, immediately before the commencement of this Act, is pending
or existing, by, against or in favour of the National Social Security
Fund before the commencement of this Act, may be continued,
enforced or prosecuted by, against or in favour of the National Social
Security Fund retirement benefits scheme without amendment of any
writ, pleading or other document.
Transition provisions in respect to the National Social Security Fund
49. Preservation of funds under the National Social Security
Fund
The funds accumulated in the National Social Security Fund before
the commencement of this Act, shall be preserved with the National
Social Security Fund Retirement benefits scheme for a period of five
years before such funds can be transferred to another licensed
retirement benefits scheme of the employee’s choice in accordance
with section 51.
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50. Contributions by existing members of National Social
Security Fund
(1) Upon the coming into force of this Act, there shall be gradual
implementation of the liberalisation of the retirement benefits sector
for the first five years in respect to the National Social Security Fund
retirement benefits scheme.
(2) For the purposes of subsection (1), the existing members of
the National Social Security Fund shall contribute -
(a) 5% of the mandatory contributions to the National Social
Security Fund retirement benefits scheme; and
(b) 10% of the mandatory contribution to a retirement benefits
scheme of the employee’s choice which is licensed to
receive mandatory contributions.
(3) Notwithstanding subsection (2) the existing members of the
National Social Security Fund may choose to continue to make their
mandatory contribution to the National Social Security Fund
retirement benefits scheme.
(4) Upon the expiry of the period of five years referred to in
subsection (1), the members referred to in subsection (2) shall be free
to contribute to a scheme of their choice which is licensed to receive
mandatory contribution.
51. Transfer from National Social Security Fund to any other
retirement benefits scheme
Upon the expiry of the of five years referred to in section 50, a
member of the National Social Security Fund retirement benefits
scheme who opts to transfer his or her savings from the National
Social Security Fund retirement benefits scheme, shall be free to
transfer his or her accrued benefits to any other licensed retirement
benefits scheme of his or her choice on a phased basis in a manner
prescribed by the Authority.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
52. Statutory Instrument to deal with transition matters arising
from repeal of Cap 222.
(1) The National Social Security Fund retirement benefits
scheme shall within thirty days after the coming into force of this Act,
disclose to the Authority all transition matters arising out of the repeal
of Cap 222 which may be inconsistent with this Act.
(2) The Minister may, in consultation with the Authority, by
Statutory Instrument, lay down procedures for dealing with transition
matters arising from the repeal of Cap 222.
Other transition provisions
53. Existing investments by schemes receiving voluntary
contributions
Notwithstanding section 68 of the Uganda Retirement Benefits
Regulatory Act, 2011 a retirement benefits scheme receiving
voluntary contributions which had made investments prior to the
coming into force of the Uganda Retirement Benefits Regulatory Act,
2011may maintain those investments in accordance with the
investment regulations and guidelines prescribed by the Authority.
54. Schemes to disclose transition matters
(1) All retirement benefits schemes shall within thirty days after
the coming into force of this Act, disclose to the Authority any
transition matters which may be inconsistent with this Act.
(2) The Authority may issue guidelines laying down procedures
for dealing with transition matters arising out of subsection (1).
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
SCHEDULE 1
Section 2 and 41
CURRENCY POINT
A currency point is equivalent to twenty thousand shillings.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
SCHEDULE 2
Section 42
GUIDELINES FOR OPERATING RETIREMENT BENEFITS
SCHEMES IN THE LIBERALISED RETIRENEMENT BENEFITS
SECTOR
1. General principles
(1) In the liberalization of the retirement benefits sector, due regard
shall be given to implementing Government’s policy on liberalization of the
retirement benefits sector in accordance with this Act and regulations made
under this Act.
(2) The liberalization of the retirement benefits sector shall be
implemented in a manner that ensures the stability of the financial sector
and allows sufficient time for the necessary adjustments in the retirement
benefits sector,
(3) The Minister, may, in consultation with the Authority, continuously
explore practical ways in which retirement benefit schemes can provide
adequate, affordable and sustainable retirement incomes to Ugandans in
order to prevent poverty during old age and to ensure sufficient lifetime
earnings.
2. Supervisory role of Authority
(1) The Authority shall be responsible for supervising all licensed
retirement benefits schemes to ensure compliance with this Act and
regulations made under this Act.
(2) The Authority shall oversee the development of retirement benefits
schemes in Uganda by establishing standards and reporting requirements as
soon as practicable for retirement benefits schemes in the public and private
sector.
3. Fair competition
(1) The Authority shall ensure that there is fair competition among the
different retirement benefits schemes licensed to receive mandatory
contributions.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(2) The Authority shall adopt a functional approach which is aimed
at—
(a) protecting and benefiting the members and beneficiaries;
(b) fostering development of the retirement benefits sector;
(c) ensuring soundness of retirement benefits schemes; and
(d) promoting the stability of the economy as a whole without
imposing an excessive burden on the retirement benefits sector,
retirement benefits schemes or on the employers.
4. Separation of assets of the scheme from assets of sponsor
(1) The assets of a retirement benefits scheme shall be kept separately
from the assets of the sponsor so as to minimize misuse of the scheme assets
and to protect accrued benefits of members in case of insolvency of the
sponsor.
(2) The separation of assets shall be irrevocably guaranteed through
appropriate mechanisms, including where appropriate, adequate insurance.
5. Audit of accounts
(1) The accounts of a retirement benefits scheme shall be audited by
an auditor appointed by the trustee of the retirement benefit scheme with the
approval of the Authority.
(2) A member, trustee, custodian, administrator or fund manager of the
retirement benefits scheme shall not be appointed as an auditor under
paragraph (1).
(3) A trustee shall, within four months after the end of each financial
year, submit a copy of the audited accounts of the retirement benefits
scheme to the Authority.
6. Preservation of benefits
(1) Early withdrawal of benefits shall be limited in order to ensure
adequate income upon retirement.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(2) Retirement benefits shall not be subjected to—
(a) unnecessary deductions of excessive costs; and
(b) imposition of penalties on early withdrawals; or
(c) imposition of penalties in the event of retirement annuity, on
early termination of a member’s policy.
7. Governance mechanisms
A retirement benefits scheme shall establish appropriate governance
mechanisms including—
(a) internal controls and self regulation procedures;
(b) appropriate risk management framework;
(b) appropriate disclosure to members and member education, and in
particular concerning the disclosure of benefits offered and the
costs involved;
(c) members’ participation in the management of the scheme
through their representatives; and
(d) appropriate dispute resolution and redress to members and
beneficiaries.
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Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
Cross References
Insurance Act Cap 213
Medical and Dental Practitioners Act Cap 272
National Social Security Act Cap 222
Succession Act Cap 162
Uganda Retirement Benefits Regulatory Authority Act, 2011
41
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
BILLS
SUPPLEMENT No. 2 20th April, 2011.
BILLS SUPPLEMENT
to the Uganda Gazette No. 27 Volume CIV dated 20th April, 2011.
Printed by UPPC, Entebbe by Order of the Government.
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
THE RETIREMENT BENEFITS SECTOR LIBERALISATION
BILL, 2011
MEMORANDUM
1. Policy and Principles
The policy behind this Bill is to liberalise the retirement benefits
sector; to provide for fair competition for mandatory contributions
among licensed retirement benefits schemes; to provide for
mandatory contributions and benefits; to consolidate and reform the
retirement benefits sector; to repeal the National Social Security Fund
Act Cap. 222 preservation of funds under the National Social Security
Fund and for other related matters.
The major principles of the Bill include providing for mandatory
contributions for all employees and employers in both formal and
informal employment to licensed retirement benefits schemes,
ensuring portability and transfer of retirement savings to a licensed
retirement benefits scheme of the employee’s choice, allowing
licensed retirement benefits schemes to compete for the mandatory
contributions and ensuring that all licensed retirement benefits
schemes are fiscally sustainable.
2. Defects in the Existing Law
The pension sector in Uganda is currently composed of the Public
Service Pension Scheme which is a Government scheme that caters
for the pensions of civil servants and the National Social Security
Fund which is responsible for the retirement benefits in the private
sector.
The National Social Security Fund which is responsible for the
retirement benefits in the private sector is regulated by the National
Social Security Fund Act Cap. 222. The National Social Security
Fund Act Cap. 222 contains provisions that inhibit the National
Social Security Fund from operating competitively in a liberalised
retirement benefits sector.
It is therefore imperative that immediate action should be taken to
enact a law to reform and liberalise the retirement benefits sector in
order to widen the scope of savings to cover employees and
employers from both the informal and formal sectors, to ensure
financial sustainability of all licensed retirement benefits schemes; to
enable licensed retirement benefits schemes to innovate new products
and services, to provide for portability and transfer of retirement
savings and to enhance the development of the retirement benefits
sector as a whole.
3. Remedies Proposed to deal with Defects in the Existing Law
There have been efforts since the early 1990s to introduce reforms in
the retirement benefits sector. The liberalisation of the retirement
benefits sector will bring about fair competition for mandatory
contributions and innovation of products by the licensed retirement
benefits schemes thus improving efficiency, transparency,
governance, accountability and harnessing the growth potential in the
liberalised retirement benefits sector.
4. Objects of the Bill
The objects of the Bill are—
(a) to provide for liberalisation of the retirement benefits sector;
(b) to provide for fair competition among retirement benefits
schemes licensed to receive mandatory contributions;
(c) to provide for mandatory contributions and benefits;
(d) to consolidate and reform the law relating to retirement
benefits;
(e) to provide for the transfer of retirement savings from one
retirement benefits scheme to another scheme in accordance
with the Act and Regulations made under the Act;
(f) to repeal the National Social Security Fund Act, Cap. 222;
and
(g) for other related matters.
5. The Bill is divided into seven parts and two Schedules.
5.1 Part I of the Bill incorporating clauses 1 and 2 provides for
preliminary matters relating to commencement and the interpretation
of words and phrases used in the Bill.
5.2 Part II of the Bill in clauses 3 to 8, deals with, among other things,
the liberalization of the retirement benefits sector by allowing all
licensed retirement benefits schemes to operate and compete for
mandatory contributions in an open market in accordance with the Act.
Clause 4 provides for the minimum requirements for operating a
retirement benefits scheme in a liberalised retirement benefits sector.
Clause 5 requires every retirement benefits scheme to have a scheme
fund into which all contributions, investment earnings, income and all
other moneys payable under the scheme rules or the provisions of the
Act shall be paid.
Clause 6 provides for occupational retirement benefits schemes.
Clause 7 deals with formation of umbrella retirement benefits
schemes. Clause 8 provides for voluntary schemes.
5.3 Part III in clauses 9 to 20 deals with mandatory registration and
contribution. Clause 9 (1) requires every employee in the formal
sector to register with a licensed retirement benefits scheme of his or
her choice and to make regular contributions to the retirement
benefits scheme in accordance with the Act and regulations made
under the Act.
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
Clause 9(2) provides for every employer in the formal sector,
irrespective of the number of employees, to make regular
contributions for his or her employees to a licensed retirement
benefits scheme in accordance with the Act and regulations made
under the Act
Clause 10 (1) provides for voluntary contributions for an employer or
employee in the informal sector.
Under Clause 10(2), an employee in the formal sector may, in
addition to the mandatory contributions made by him or her, and his
or her employer under clause 9, make voluntary contributions to a
licensed retirement benefits scheme of his or her choice.
Clause 11 deals with portability and transfer of accrued benefits from
one retirement benefits scheme to another scheme in accordance with
the Act and Regulations made under the Act.
Clause 12 provides for the rate of contributions.
Clause 13 deals with remittance of contributions. Clause 14 provides
for retirement savings account.
Clause 15 provides for a retirement benefits identification number to
be issued by a retirement benefits scheme in consultation with the
Authority. Clause 16 provides for crediting of retirement savings
account.
5.4 Part IV in clauses 17 to 20 deals with benefits. Clause 17
requires a retirement benefits scheme receiving mandatory
contributions to offer mandatory benefits including—
(a) age benefit;
(b) survivor’s benefit;
(c) invalidity benefit;
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
(d) any other benefit as the Authority may approve.
Clause 18 deals with optional benefits which include—
(a) medical and maternity benefit;
(b) unemployment benefit;
(c) education benefit;
(d) home ownership benefit;
(e) funeral benefits; and
(f) any other benefit as the Authority may approve.
Clause 19 provides for modification of mandatory benefits. Clause 20
provides for innovation of retirement benefits products and services.
5.5 Part V in Clauses 21 to 39 covers accessing of benefits. Under
Clause 21, a member to is entitled to receive his or her benefits
whenever they are due.
Clause 22 provides for midterm access of benefits. Clause 23 deals
with member’s entitlement to age benefits. Clause 24 provides for
accessing of voluntary contributions. Clause 25 provides for survivor
benefits. Clause 26 provides for invalidity benefits.
Clause 27 deals with emigration grant. Clause 28 provides for
accessing of age benefits. Clause 29 deals with lump sum and annuity
arrangements for schemes receiving mandatory contributions. Clause
30 provides for existing members to choose mode of payment of age
benefit. Clause 31 deals with ceasing of membership and mandatory
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
contributions. Clause 32 provides for closing of retirement savings
account. Clause 33 deals with ledger of unallocated or unclaimed
balances. Clause 34 provides for computation of benefits.
Clause 35 provides for an exception to section 70 of the Uganda
Retirement Benefits Regulatory Authority Act 2011.Clause 36
provides for tax exemption. Clause 37 deals with measures to protect
retirement savings. Clause 38 provides for a schemes depository fund
to be established. Clause 39 provides for the Authority to prescribe
minimum cash balances.
5.6 Part VI in clauses 40 to 46 deals with miscellaneous provisions.
Clause 40 provides for powers of the Minster to make Regulations.
Clause 41 provides for amendment of Schedules.
Under clause 42, the Authority may issue guidelines for giving effect
to the provisions of the Act and for its due administration.
Clause 43 provides for offences and penalties. Clause 44 provides for
recovery of civil penalties. Clause 45 deals with enforcing of
compliance. Clause 46 provides for exchange of information with
other regulators.
Part VII in clauses 47 to 55 deals with repeal, savings and transition.
Clause 47 deals with repeal of the National Social Security Fund Act
Cap. 222. Clause 48 deals with the effect of the repeal of Cap. 222 on
the status of the National Social Security Fund. Clause 49 provides
for preservation of funds under the National Social Security Fund.
Clause 50 deals with contributions of existing members of the
National Social Security Fund.
Clause 51 provides for the transfer from the National Social Security
Fund to any other retirement benefits scheme.
Clause 52 provides for the Minister to issue a statutory instrument to
deal with transition matters arising from the repeal of Cap. 222.
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
Clause 53 deals with existing investments by schemes receiving
voluntary contributions. Clause 54 provides for schemes to disclose
transition matters.
5.7 Schedule 1 of the Bill gives the value of a currency point.
Schedule 2 provides for guidelines for operating retirement benefits
schemes in the liberalised retirement benefits sector.
PROF. EPHRAIM KAMUNTU (HON),
Minister of state for Finance Planning and Economic Development
(Planning);
Also holding Portfolio for Minister of Finance Planning and
Economic Development.
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011
Bill No. 2 Retirement Benefits Sector Liberalisation Bill 2011