East African Gazette
Kampala
According to the 10th Annual Retirement Benefits Sector Report by the Uganda Retirement Benefits Regulatory Authority (URBRA), the number of individuals saving for retirement has risen from 3,015,806 in 2022 to 3,142,311 in 2023.
The report also shows an increase in the count of employers making voluntary contributions, from 273 in 2022 to 298 in 2023.
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State Minister for Finance and Planning, Amos Lugolobi, emphasized the significant improvement in compliance with contribution remittance during the report’s unveiling at the Uganda Media Centre in Nakasero, Kampala, Uganda, on February 29, 2024.
“There had been cases of non-remittance, unpaid benefits or misappropriation of savers’ funds. I am happy to note that in 2023, URBRA’s supervisory actions led to the recovery of shs26 billion. This directly benefits members who would otherwise have lost out on their retirement benefits,” he noted.
He emphasized that with more employers making voluntary contributions, it indicates that a greater number of Ugandans will have a source of income during retirement.
He highlighted that the main sign of sector expansion is the rise in total sector assets from shs20 trillion in 2022 to shs22 trillion in 2023.
“This growth is mostly a reflection of prudent investment of savers’ funds, a result of which was an average of 11% interest declared to members. At a macro level, savers will be happy to learn that their simple act of saving for retirement contributes significantly to national development,” Lugolobi added.
He said: “As you may know, domestic savings avail money for government borrowing through bonds and securities. As indicated in the 2023 report, up to 79% of the funds are invested in government securities. Still with regard to the national economy, in 2023 the retirement benefits sector contributed 60% of gross domestic savings, accounting for 11.5% of the gross domestic product”.
In addition, he pointed out that the schemes paid a substantial amount of shs235 billion in taxes to the government in 2023, surpassing the shs227 billion paid in 2022.
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He emphasizes the significance of saving for retirement as an act of patriotism. However, it he noted that despite the sector’s growth, there were notable challenges faced in 2023 that must be addressed to maintain the positive trends.
He mentioned that some of these challenges may require collaboration with stakeholders from other sectors, as they are influenced by factors such as the overall economic performance, inflation, exchange rates, population trends, and employment rates.
Lugolobi, highlighted URBRA’s importance of continuously monitoring these trends to assess their ultimate impact on retirement benefits.
URBRA is tasked with resolving important issues within the sector, such as employers’ failure to submit contributions and the delayed disbursement of benefits.
Additionally, it is responsible for ensuring compliance with financial reporting and disclosure obligations.
He said regulators and all relevant entities should prioritize the management of scheme operational expenses, as these have a direct influence on the returns that savers receive.
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“Specifically for the savers’ benefit, it is important to address the challenge of preservation of benefits pre and post-retirement. Prior to retirement, as much as possible members should resist the temptation to withdraw savings, even though there are avenues for it. Post-retirement, people should preserve their benefits by having a clear plan for their lumpsum payout,” he advised.
He underlined the importance of individuals who have not yet chosen to save for retirement learning about how the sector operates and how they can become part of a retirement plan of their preference.
“The one assurance I can give all Ugandans is that the sector is effectively regulated and your savings are safe. From a patriotic point of view, when you save you contribute directly to national development,” he added.