Prof Nawangwe explains Shs16 billion row with NIC
Makerere University Vice Chancellor, Prof Barnabas Nawangwe
KAMPALA- Makerere University Vice Chancellor, Prof Barnabas Nawangwe, has written to staff explaining the genesis of the Shs16.7b dispute between National Insurance Company (NIC) and the university employees.
Last week, Parliament called for appointment of a select committee to investigate Prof Nawangwe and other university officials in the Shs16.7b staff pension row with the insurance company.
The MPs alleged that Prof Nawangwe and other university officials caused a Shs8.7b loss in settlement of a long-standing dispute between Makerere University Retirement Benefits Scheme (MURBS) and NIC.
However, in a letter addressed to all university staff on August 7, Prof Nawangwe explanation indicated that the pension dispute started in 2005 when government divested its 60 per cent stake in NIC, which shares were sold to the Industrial and General Insurance Company (IGIC) of Nigeria.
He said following the divestiture, the staff through Makerere University Academic Staff Association (MUASA), demanded to withdraw their savings from NIC which was managing the university’s pension scheme. “Neither Makerere nor NIC knew the amount held by NIC on behalf of the university staff. Government requested the Auditor General to conduct an independent assessment to ascertain the amount held by NIC on behalf of the University,” Prof Nawangwe explained in his letter.
The VC added that NIC paid to Makerere Sh10b which was agreed upon in the interim meeting of both parties chaired by President Museveni. He explained that acting on behalf of the Auditor General, the PWC audit firm submitted a report which advised that as of August 13, 2010, the fair value of the pension fund was estimated at Shs26.88b and the report was based on actual valuation of the fund. He said NIC did not welcome the report of owing Makerere staff Shs26.88b and insisted they owned only Shs10b and paid that amount to MURBS. Prof Nawangwe said government paid the balance of Shs16.8b to MURBS when staff went on strike and directed MURBS and Makerere to sue NIC to recover the money and return it to government. MURBS and Makerere later sued NIC.
“NIC passionately opposed liability of Shs26.88b and instead presented another actuarial report showing that the estimated value of the fund was Shs16.88b of which they had paid Shs10b leaving a balance of Shs6.88b,” Prof Nawangwe said.
He said during the litigation in court, NIC insisted it owed only Shs16.88b to Makerere staff since the university did not have evidence to challenge the claim, a judgment in respect of Shs6.88b balance was entered since NIC had paid Shs10b.
Prof Nawangwe said in 2018, NIC proposed an out-of-court settlement and offered a property on Kampala Road valued at Shs8.9b. He said MURBS lawyers, Makerere’s external lawyers, the University Secretary and legal director negotiated with NIC and a consent judgement was made. .
