Govt will go ahead with Pension sector liberalisation - Muhakanizi
Posted Monday, February 3 2014 at 02:00
Intention. The pension sector will be liberalised to do away with the current inefficiencies within the sector..
Government, through ministry of Finance, Planning and Economic Development, has assured the public that the liberalisation of the pensions sector in Uganda will go ahead as planned, despite opposition from some institutions and trade unions because it is tired of paying ghost pensioners.
The Finance ministry says the cost of paying pensioners through the Public Service Pension Scheme programme is impacting negatively on government budget.
Reacting to criticisms from officials of the Gender ministry and the National Organisation of Trade Unions among others against the move to liberalise the pension sector in Kampala last week, Secretary to the Treasury Keith Muhakanizi said: “Government is tired of paying the cost of pensioners through the Public Services Pension Scheme and so the sector must be liberalised.”
Mr Muhakanizi explained that the fiscal price of paying pensioners on government is high yet at the same time there are a lot of inefficiencies in the current Public Service Pension Scheme.
“In the 2012/13 budget, government lost more than Shs60 billion in payment of ghost pensioners by the Ministry of Public Service due to massive corruption,” he said, adding that it has been very difficult for Ministry of Finance to iron-out who was responsible for the creation of ghost pensioners on the government pay roll.
“Nobody would be blamed for lines of ghost pensioners since there are three ministries involved; Ministry of Finance, Planning and Economic Development, Ministry of Gender Labour and Social Development,” Mr Muhakanizi said.
Critics have among others argued that the performance of Public Service Pension Scheme through the National Social Security Fund (NSSF) has improved and there is no need to liberalise the sector.
The NSSF is currently being supervised by the Ministry of Finance, Planning and Economic Development because the institution was performing poorly under the Ministry Gender Labour and Social Development.
In a related development, Mr Muhakanizi said the NSSF is going to be privatised and will remain a mandatory avenue for people to save their money but in a liberalised environment operating along other schemes regulated by the Uganda Retirement Benefit Regulatory Authority.
He added that government will not be responsible appointing the board of Fund Trustees as it is the case now.