MPs call for a stay on the debate on the Retirement Benefits Authority Bill in order to wait for a complementary law to liberalize the pensions sector.
This Thursday Parliament will debate whether or not to pass a new comprehensive law on liberalizing the pension sector.
The Retirement Benefits Authority Bill 2010 will end the monopoly of the National Social Security Fund (NSSF) and open the pension sector to competition. It will create an independent authority to manage and operate retirement schemes and will protect interests of beneficiaries.
With the new law, beneficiaries will not have to wait till retirement to receive their pensions in a lump sum. They can opt to receive monthly payments or save and invest the money for the future.
Labor unions across Uganda are pleased with the options offered by the Retirement Benefits Authority Bill. However Prime Minister Apollo Nsibambi, who is the Leader of Government Business in Parliament, says there is need for more consultation before the MPs can decide on the matter.
On Tuesday afternoon Parliament started the debate on the Bill. Many MPs said they were unhappy with the way NSSF managed the pension sector and they demanded significant reforms to the process.
Despite this, there were calls for caution from both sides of the aisle.
Francis Epetait, the Ngora MP, said the passing of the Retirement Benefits Authority Bill should be delayed as Parliament awaits another law that will fully liberalize the pension sector. He said that with the 8th Parliament winding down, it makes no sense to pass a law that will be undermined by another.
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Epetait's motion for a delay was seconded by the Aruu County MP Odonga Otto.
The Nakaseke Woman MP, Rose Namayanja, also called for government to fast track a second bill that will liberalize the pension sector which would complement the Retirement Benefits Authority Bill.
However Fred Omach the State Minister for Finance said there was no need for delay. He said the liberalization of the pension sector wasn't as important as the immediate need to regulate the industry.
Omach said cabinet has already passed a Principles of Liberalization Bill that will be ready before parliament is dissolved.
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Last week, the NSSF board chairperson and managing director also called for the delayed passing of the Bill. They said it would put workers' savings in danger of misuse because the proposed law doesn't have enough measures to protect them against manipulation.