Uncertain. An old man in Karamoja. Photo/ERONIE KAMUKAMA Contributions continued on a downward trend with a 10.2 per cent drop from Shs394 billion in June to Shs353 billion in September.
Throughout 2020, the economy has taken a pounding from Coronavirus (Covid-19); which has significantly disrupted economic activity, resulting in loss of jobs and incomes.
Experts say the country is yet to know the full extent of the economic impact of Covid-19.
The retirement benefits sector has equally suffered the effects of the pandemic, but the regulator says many schemes have so far weathered the storm.
Mr Martin Nsubuga, chief executive officer at Uganda Retirement Benefits Regulatory Authority (URBRA), says the sector remained stable, performing relatively well in investment.
He explains that assets under management of the total retirement sector portfolio have grown by 8.5 per cent from Shs14.56 trillion in March 2020 to Shs15.8 trillion in September 2020.
“On a year-on-year basis, the sector portfolio grew by 16.8 per cent, from Shs13.5 trillion in September 2019 to Shs15.8 trillion as at September 2020,” he says.
Mr Nsubuga adds, “There was an increase in investment income from Shs375 billion in June 2020 to Shs421 billion in September 2020.”
This trend is attributed to prudent investment and improved scheme governance with a strong oversight of the regulator.
“We licensed three new retirement schemes but lost one scheme, bringing the number of licensed retirement benefits schemes to 68,” he says.
Also, the industry has seen a growth in the number of participating employers under licensed umbrella schemes, growing from 142 since December 2019 to 175 of December 2020.“We have licensed more trustees since December 2019, with the number of trustees increasing from 146 to 234 as of December 2020. This reflects confidence in the supervisory framework and growth in scheme’s stewardship. We aspire to further enhance the competencies of these trustees through our Trustees’ Certification Program,” Nsubuga says.Adverse effects of Covid-19The retirement benefits sector faced a number of challenges as a result of Covid-19. Figures from the regulator show that contributions continued on a downward trend with a 10.2 per cent drop from Shs394 billion in June 2020 to Shs353 billion in September 2020.There were also delays in contributions by some schemes in the education, hospitality and manufacturing sectors as the employers struggled to meet their operational costs.Mr Nsubuga further explained that Bank of Uganda (BoU) suspended distribution of dividends by financial institutions, which affected the income streams of many schemes that […]