Uganda’s pension sector has registered a 10% increase in total assets in the last year to reach an unprecedented sh22 trillion.
This was announced by Amos Lugoloobi, Minister of State for Planning as he released the Sector’s 2023 annual performance report on Thursday.
The growth in sector assets was mainly a result of increased net contributions valued at shs 700 billion and income generated from investments valued at shs1.3 trillion.
Further growth was recorded in the number of people saving for retirement, which rose from 3,015,807 in 2022, to 3,142,311 in 2023, representing 15% coverage of Uganda’s total working population.
“The simple act of saving a portion of one’s income for retirement sets in motion a chain of decisions and actions that ultimately have a positive impact on the national economy. Saving for retirement is therefore a patriotic deed,” Minister Lugoloobi said.
He noted that currently, retirement savings account for 60% of Uganda’s Gross Domestic Savings, and 11.5% of the Gross Domestic Product (GDP).
Additionally, retirement benefits schemes contributed to the economic growth through the payment of taxes amounting to shs235 billion to the government in taxes in 2023, up from shs227 billion in 2022.
Explaining the key factors behind the 2023 sector performance, the CEO of URBRA, Martin Anthony Nsubuga cited the regulator’s strict supervisory actions and increased compliance on the part of the regulated entities.
Key among the regulator’s actions was the introduction of a risk-based supervision system, which enables the URBRA to identify and address risks before they affect the ability of regulated entities to meet their obligations. The ultimate outcome is better protection of the savers’ funds.
Nsubuga also attributed the good performance to other factors that drive the sector saying, “governance, administrative and investment costs, density of contributions all come together to drive sector growth.
“Working at scheme level, we sought to identify and address weaknesses in risk management. In some instances, this included taking considered and proportionate enforcement action against some schemes and service providers,”Nsubuga said.
He reassured all sector players that going forward, URBRA would be quicker and bolder in the use of its powers, with an increased focus on scheme management and operation, where non-compliance could be an indicator of broader governance failings.
The Chairman URBRA board of directors, Julius Junjura drew attention to the main goal of the retirement benefits sector, which is to ensure that all Ugandans who retire don’t end up in old age poverty .
“Retirement benefit arrangements move resources obtained during work life to post-retirement when income is no longer obtainable. This implies that assessment of the sector must go beyond financial performance to cover the interests and rights of savers. Consistent remittance of contributions and timely payment of benefits must be emphasized,”Junjura said.
