Francis Gimara, the ULS president told legislators that the retirement benefits sector is one of the most fragile sectors in the economy where strict regulatory and state control measures are required.
While the intention of the Retirement Benefits Sector Liberalization bill, 2011 is commendable, it poses a threat to member's savings Uganda Law Society-ULS has warned. This is part of the analysis of the bill presented by ULS to the Finance Committee of Parliament, which is scrutinising the bill.
The Retirement Benefits Sector Liberalization bill, 2011 seeks to repeal the Pensions Act, Cap 286 and the National Social Security Fund Act, Cap. 222 and open the pension sector to competition, which will consequently end the monopoly of the National Social Security Fund-(NSSF).
The bill also contains a proposal to allow those who have saved for more than 10 years to access 30 per cent of their savings to secure mortgages or loans from any financial institution for the purchase of a house.
While presenting their findings, Francis Gimara, the ULS president told legislators that the retirement benefits sector is one of the most fragile sectors in the economy where strict regulatory and state control measures are required.
He said the proposal to leave the pensions sector to the market forces of demand and supply is dangerous since liberalization will only attract investors who major aim to make profits.
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Gimara also objected to a proposal in the bill, which seeks to place retirement benefits under trusts, saying law governing trusts in Uganda is not comprehensive enough.
He said such classification in the absence of a comprehensive law is risky since it will be difficult to regulate the operations of these schemes. A trustee is a person or firm that holds or administers property or assets for the benefit of a third party.
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Gimara was in the company of Irene Kwawa, the Head Rule of Law in ULS and two society members, Martha Timugiibwa and Brian Kwame.