A Parliamentary report on the Select Committee into NSSF has pinned Equity Bank for using workers money to run their business.
MPs found out that although the Bank collected the savings from various companies and institutions on behalf of the Fund, it refused to remit the savings to NSSF.
The discoveries by Parliament are contained in the annual inspection reports carried out by Uganda Retirement Benefits Regulatory Authority (URBRA) conducted between 2019 and 2020 that unearthed under remittance of contributions by collecting banks.
“A case in point is that of Equity Bank collected over Shs900M between 10th and 17th June 2019, but only Shs673M was remitted. Equity also collected Shs632M between 8th and 13th April 2019 but only Shs302M was remitted by the due date of 15th April 2019. URBRA then made recommendations that NSSF Board should ensure that banks comply with MoUs signed with the Fund,” read in part the Parliament report.
The Select Committee also observed that there was a period from November 2018 to November 2020 which is not accounted for because the MOU between Equity Bank and NSSF had expired.
The report read, “Therefore, Equity Bank could not be held liable if the didn’t remit and contributions to NSSF between November 2018 and November 2020.”
The Committee further observes that whereas collecting banks receive money from employers and subsequently remit to two main accounts held with Stannic Bank and Standard Chartered Bank for majorly investment purposes, it was established that the Fund also operates other expense accounts in a number of banks, which draw funds from the two main accounts.
However, URBRA was not able to interrogate the bank statements for the two main accounts that receive collect contributions due to restricted access to these Bank accounts by NSSF.
URBRA Act 2012 provides that URBRA as a regulator for a welfare fund and the issuers of the annual licenses, ought to conduct mandatory annual inspections. Section6(c) of the URBRA Act 2011 gives the Authority powers to conduct any inspection and examinations for books of accounts, records, returns and any other documents or premises of a licensed person or scheme.
Mwine Mpaka, Chairperson Select Committee on NSSF Affairs faulted the officials of URBRA for refusing to use the powers bestowed on them, and instead looked on as NSSF managers bullied them into restricting access to bank information on savers money.
He said, “URBRA has been facilitated to build capacity to conduct annual inspections. They cannot be excused that the Act does not mandatorly require them to conduct annual inspections. The failure to conduct annual inspections questions the competence of the Authority that is mandated to issue licenses yearly to the Find. They have a fiduciary duty to ensure the success of the fund.”
Mwine also blamed the rot in NSSF on the incompetence of URBRA pointing out that the Fund’s last inspection report was done in 2020, thus, there are no inspection reports for 2021 and 2022.
“We find this inexcusable. The absence of routine inspections by URBRA may partially explain the existence of some of the irregularities identified in this report,” said Mpaka.
Parliament has now tasked URBRA to deal with its incompetence and ensure all inspections on all pension schemes in Uganda are conducted.
Parliament also tasked NSSF to ensure the Memorandum between banks collecting savers money are executed to their fullest and that Equity Bank and other banks remit all the savers money to NSSF are required in the MOUs.
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