Ethical concerns in the management of retirement benefit schemes in Uganda: A case study of Kabale and Kampala Districts

Abstract

The research explores ethical concerns in the management of retirement benefit schemes in Uganda using Kabale municipality and Kampala central division as case studies. The study set to establish ethical issues in the legal foundations, rules, and regulations governing the structure of retirement benefit schemes; and members’ participation in these programmes. This research was motivated by the growing retirees’ anxiety in the management of retirement funds which continue to grow in volume but where we also see retirees exploited by brokers and increasing misappropriation of their savings by managers of retirement benefit schemes The researcher gathered data from 80 respondents, 60 of whom were retirees and 20 fund workers. Interviews and survey methods were used and were supplemented by documentary analysis of policy documents, the constitution and human rights documents. The researcher found out that retirement benefit schemes in Uganda cover only employees in the formal sectors leaving out the majority population engaged in informal sector where there are less than 5 employees and therefore fall below the NSSF threshold (NSSF Act, 1985). Secondly, he found out that the laid back attitude contributed in no small measure to glaring theft of retirement benefits as reported both in NSSF and public service pension sector and that this theft continues to deprive workers of their entitlements. It was found out that graduate retirees were more likely to demand for their benefits because they comprehend retirement benefits as entitlements compared to their less educated colleagues (with certificates or diplomas) and are often dwarfed by technological systems used by fund managers in the administration of retirement benefits. The study found out that other than NSSF and PSPS, retirees in Kabale have additional social protection provided by the extended family and clan in which they are active members as opposed to retirees in Kampala who live in nucleus households and depend on cash to secure basic necessities including food. The government which is supposed to take care of its people including provision of social security to retirees, has kept a deaf ear on the need to widen retirement benefits coverage in the country. In June 2011, Parliament enacted the Uganda Retirement Benefits Regulatory Authority Act but for 18 months now, the Authority is not yet operational. The study noted that most of the legislations on retirement benefits are not readily available and those available are written in a legal language that is not easily understood by retirees. The study further noted that retirement benefits have for long not been a priority of government and that is why the actual package to retirees has remained low amidst the increasing cost of living. There is no political will to transform retirees associations into a nationwide retiree’s movement that would enhance their collective bargain. With liberalization of the sector and the new crop of retirees who are aware of their rights, retirement benefits will feature among the government priorities. The study recommends that the government ensures that retirement benefit schemes are run professionally on principles of accountability, transparence and good governance and at the same time comply with requirements and stipulations of the regulatory authority. That the new crop of retirees with better education and training should assert themselves to demand for improved benefits. They should also organize themselves to speak with one voice across the country for government to appreciate their status in society and act on their packages accordingly. Retirees must be aware of the challenges of liberalization that come with social ills in society including corruption and embezzlement that may increase in the sector with liberalization. They therefore ought to demand for active participation and oversight responsibility of retirement benefit schemes in the country. All this, should be done bearing in mind that retirement benefits are entitlements to workers and the state together with policy makers has a duty to ensure their timely and meaningful provision to due beneficiaries.