11th Annual General Meeting to be held on 24th February 2023
1.0 PREAMBLE
The Parliamentary Pension Scheme was established by an Act of Parliament to provide retirement benefits to Members of Parliament and staff of the Parliamentary Commission on permanent and pensionable terms. Section 18 of the Act provides the Board of Trustees with the responsibility of management of the Scheme. The Board is required to submit annual reports to the Annual General Meeting under Section 25 of the Act.
The 11th Annual General Meeting was held on 24th February 2023 at the conference hall, Parliament building.
The Chief Operations Manager, Ms. Nightingale Mirembe Ssenoga gives Welcome Remarks
The Chief Operations Manager welcomed Members to the 7th Annual General Meeting.
The highlights of her presentation were as follows;
a) During the financial year 2017/18, the Return on Investment was 13.0% before tax and 11.0% after tax. The outlook presented a higher economic growth for Uganda of 6%, Kenya 5.9% and Tanzania 6.8%.
b) The Scheme witnessed relatively low returns on investments.
c) The equity market was on recovery.
d) The Scheme received 56% budget support through subvention from the sponsor for the financial year 2017/18 and 50% for the financial year 2018/19.
e) The funding from the sponsor was 44% for the financial year 2017/18 and 50% for the financial year 2018/19.
f) The proportion of operational expenses of Asset was within the 2% recommended by the Investment Policy Statement.
g) The proportion of funding from the Sponsor was reduced to 0.77%.
h) The staffing level was as follows;
i) Chief Operations Manager
ii) Head of Internal Audit
iii) Finance Manager
iv) Benefits Administration Manager
v) Administrative Secretary
vi) Administration Officer
vii) Information Technology Officer
viii) Accountant
ix) Loans Officer
x) Administration Assistant
xi) Assistant Accountant
xii) Driver/ Office Assistant
i) The Scheme developed a number of policy documents which included the following;
i) The Pensions regulations
ii) Strategic plan
iii) Investment Policy Statement and
iv) Lending regulations (& loans Policy)
v) Benefits Administration Manual
vi) Finance Manual
vii) Administration and Operations Manual
viii) Member Handbook
j) The key achievements were as follows;
i) Optimum funding level & growth of the fund.
ii) Developed and reviewed the Strategic Plan and Investment Policy Statement.
iii) Operationalized the loans Scheme
iv) Developed Administration and Operations Manual
v) Conducted Member Training
vi) Promptly paid out Pension benefits
vii) Increased payout of Death benefits
viii) Developed Member Handbook
ix) Established a Procurement and Disposal Unit for the Scheme.
k) The challenges registered were as follows;
i) Incomplete information on member files
ii) Unclaimed benefits
iii) Poor attendance during Members education Programs
iv) Loan product perceived as discriminatory to pensioners
v) Inadequate storage and office space
vi) Low pensions for members who retired before 2011
l) Work in progress was as follows;
i) Development of a Risk Management Policy.
ii) Proposed Amendment to the Parliamentary Pension Scheme Act.
iii) Implementation of the Strategy for 2018/23.
m) The status of recommendations of the Auditor General for FY 2017/18 were as follows;
|
|
Issue |
Status |
|
1. |
Expired Trustees Licenses
Management was advised to expeditiously put in place a process of monitoring the expiry of all licenses and ensuring renewals are done timely |
Six out of eight Trustees received their licenses. Required information for pending renewals was to be submitted to the Uganda Retirement Benefits Regulatory Authority (URBRA) by the 15th day of March 2019. Renewal process would commence 3 months to expiry. |
|
2. |
Incomplete Fund Manager’s Reports
Management was advised to follow up with Fund Managers to accrue interest earned on investments properly as they excluded interest earned on the first day of the investment. |
It was resolved with both Fund Managers by December 2018. Reports were in compliance with the Inclusive/Exclusive method of valuation of accrued interest. |
n) The strategic objectives for the period 2018/23 were as follows;
1. Improved efficiency and effectiveness in the delivery of the Scheme’s business operations.
• Sustain fund management practices and procedures for continued quality service delivery.
• Establish and implement robust pensions fund administrative process and procedures.
• Monitoring overall fund status and its sustainability.
• Research and advocacy for legislative and policy environment.
2. Deliver retirement benefits to members that are responsive to the changing economic livelihood.
• Research on pension payouts that optimize member benefits.
• Advocacy for suitable legislative and policy environment.
• Develop and implement rationalized pension structure that optimizes members’ benefits.
3. Optimize Investment Fund Management to maintain the Scheme’s long –term solvency and sustainability.
• Research to inform investment sector priorities.
• Advocacy for suitable investment legislative and policy environment.
• Build capacity to manage risk and long-term sustainability of the fund.
4. The strategic theme of 2018/23 was “To attain and sustain institutional autonomy and pension management efficiency”.
o) She informed members that a number of documents had been provided for the meeting as follows;
i) Members handbook
ii) Reports from Service providers
iii) Finance Managers report
iv) Minutes of the 6th Annual General Meeting and
v) A report on the operations of the Scheme
p) She requested members to register attendance and provide bank details to enable processing of their transport refund.
3.0 CHAIRPERSONS STATEMENT
The highlights of the Chairpersons Statement were as follows;
On behalf of the Board of Trustees and Staff of Parliamentary Pension Scheme, he welcomed members to the 7th Annual General meeting.
The Chairperson Board of Trustees Hon. Achia Remigio presents his statement.
He said that;
i) The Board was able to implement the Scheme’s operational plan as well as invest members’ funds profitably. The Board had continued to provide guidance to Management through the review and approval of new policies.
ii) The Parliamentary Commission had continued to support the Scheme through subvention, logistical and technical support. On behalf of the Board of Trustees, he sincerely thanked the Parliamentary Commission for the timely remittance of the members’ contributions and loan recoveries during the year.
iii) The Fund registered positive performance in the financial year ended 30th June 2018. The investment income before tax increased from UgX. 19.85 billion to UgX. 23.06 billion. The percentage growth was 16.2% compared to 58.4% in 2017. The assets of the Scheme grew from UgX. 152.83 billion to UgX. 204.55 billion. The Scheme registered reasonable growth in member contributions and interest income. The Fund posted a return on average investable fund of 13% before tax and 11% after tax.
iv) The benefits paid out amounted to UgX. 3.75 billion compared to UgX. 2.05 billion paid out last year.
v) The Board remains focused and committed to superior service delivery that increases efficiency of the Scheme for the benefit of its members. The Board was able to review the Scheme’s strategic documents such as the Finance Manual, Strategic Plan and a 3 –year Investment Policy Statement. The policies would offer direction in the management of the Scheme operations and investments.
vi) The Operating Environment was as follows;
a) The economy grew by 5.8%, posting an improvement compared to 3.9% in 2016/2017. The growth was driven by a strong performance in the major sectors of Agriculture, Services and Industry and the easing monetary policy.
b) The Industrial sector posted a growth of 6.2% compared to 3.4% in 2016/2017 while the Service sector grew by 7.3% compared to 5.4% in the previous year.
c) The growth in the three major sectors was substantially higher compared to the financial year 2016/2017.
d) The annual headline inflation reduced to 2.2% from 6.4% in 2016/2017 while core inflation declined to 0.9% by June 2018 from 4.9% in June 2017.
e) In Kenya, the Nairobi All Share Index (NASI) improved to 14.06% by June 2018 compared to 0.09% in June 2017. The local share index (NSE 20) further declined to -8.09% from -0.91% in June 2017. The 91-day Treasury bills posted an average yield of 7.94%. The overall inflation reduced to 4.3% by June 2018 from 6.3% in June 2017. The Kenyan shilling gained 0.86 % against the US dollar.
f) The stocks at Uganda Securities Exchange also gained good grounds. The All Share Index (ALSI) improved to 24.52% in 2018 from - 4.3% in 2017. The LSI increased to 12.09% from a loss of 1.7% in 2017. The 91-day Treasury bills registered an average interest rate of 9.8%3 during the year. On average, the inflation was 5.5%. During the Financial year 2017/2018, the shilling depreciated by 6.7% to the US dollar.
g) In Tanzania, the All share Index [ASLI] improved from negative 10.6% in 2017 to positive 12.89% in June 2018, while the local share Index [TSI] further dropped to -8.9% in 2018 from -0.38% in 2017. The 91-day Treasury bills registered an average interest rate of 2.85% during the year. The overall inflation was 3.4%1. During the Financial year 2017/2018, the Tanzanian shilling appreciated by 1.6% to the US dollar.
h) In Rwanda, the ALSI improved to 5.4% in June 2018 from -4.04% in 2017 while the local share Index [RLS] gained greatly to 9.8% in June 2018 from -16.22% in 2017. The 91-day Treasury bills registered an average interest rate of 5.45% during the year. The overall inflation was 1.4%1. During the Financial year 2017/2018, the Rwandans Francs shilling appreciated by 3.6% to the US dollar.
i) In 2018, the global world economic growth strengthened to 3.8% from 3.5% in 2017, a notable rebound in global trade. This growth was driven by an investment recovery in advanced economies, continued strong growth in emerging Asia, Europe, and signs of recovery in several commodity exporters.
vii) The Outlook was as follows;
a) In the East African region, the growth for 2019 was projected at 6.0%, 5.9%, 7.1%, and 6.8% for Uganda, Kenya, Rwanda and Tanzania respectively. This macro indicator shows that there will be improvement in regional economic growth.
b) Global growth is expected to pick up to 3.9 percent in 2018 and 2019 supported by favorable market conditions, accommodative financial conditions, and the domestic and international expansionary fiscal policy in the United States. The partial recovery in commodity prices should allow conditions in commodity exporters to gradually improve. The higher rates of growth for the major global economies are expected to continue in 2019. While global inflation remains low at present, a gradual upward trend in inflation is expected.
c) In the Euro Zone, growth is projected at 2.4 % in 2018 driven mainly by strong domestic demand, accommodative monetary policy, and robust external demand conditions.
d) In Emerging Market and Developing Economies (EMDEs), growth is projected to increase to 4.9 % in 2018 and 5.1% in 2019 supported by increasing agricultural productivity, strong external demand, recovery in international commodity prices and eased financial conditions in the global financial markets.
e) In Sub-Saharan Africa (SSA), growth is projected to increase to 3.4 % and 3.7 % in 2018 and 2019 respectively. The projected growth will be supported by public infrastructure investment, stronger commodity prices and external demand conditions, and improved business confidence in economies such as South Africa.
f) Kenya has projected growth at 5.9%, Tanzania at 6.8% and Rwanda at 7.1%. This positive outlook will result in better returns on investments in the regional market.
g) The Uganda economy is expected to improve to 6.0% in 2019 from 5.8% in 2018 due to the recovery in private sector credit, favorable weather conditions, increase in Foreign Direct Investment (FDI), the continued robust government investment in infrastructure and revival of the private investment activity in the economy. All these positive developments, together with the continued improvements in the global economic outlook will improve performance of the Ugandan economy.
viii) The Achievements were as follows;
a) Operationalized the Loan Scheme.
b) Reviewed Policies and Procedures such as the Finance Manual and Human Resource Manual.
c) Developed Administration and Operations Manual.
d) Enhanced capacity of the Board of Trustees and staff through training.
e) Strengthened Risk Management through continuous appraisal of the effectiveness of the internal control systems.
f) Conducted Member Training.
g) Registered positive growth of the Fund.
h) Commenced the development of the Investment Policy Statement and Strategic Plan.
i) Promptly paid out Pension benefits.
j) Increased payout of Death benefits.
ix) The Challenges were as follows;
a) Members’ slow response and failure to provide information to update their files.
b) Inadequate allocation of funds to Loans to meet members’ demands due to the limitations of the Law.
x) He relayed the following appreciation remarks;
a) As the Scheme continued to realize tremendous growth, he conveyed special thanks to the Members for their unrelenting support. He pledged to continue collective engagements with all the stakeholders to ensure increased member satisfaction.
b) He sincerely recognized and appreciated the continued support of Parliamentary Commission for the timely remittance of contributions, subvention, allocation of office space for the Secretariat, Board and Committee meetings, provision of Human Resource, Legal and Procurement advisory services which would otherwise have been a heavy cost to the Scheme.
c) He commended the Board of Trustees for their continuous oversight and commitment that ensured smooth business operations.
d) He thanked the Uganda Retirement Regulatory Authority, service providers and business partners for their tremendous contribution to the success and growth of the Fund and the industry at large.
i) On behalf of the Board, he thanked Management and Staff of the Parliamentary Pension Scheme for their commitment and services offered to the Scheme and Members.
4.0 SPEECH BY THE CHIEF GUEST – RT. HON. SPEAKER OF PARLIAMENT
The Chief Guest – the Rt. Hon. Speaker Ms. Rebecca Alitwala Kadaga delivered her speech. She made the following remarks;
i) She welcomed members present and thanked the Board of Trustees for successfully organizing the 7th Annual General Meeting.
ii) She expressed delight in participating under the theme “To attain and sustain institutional autonomy and pension management efficiency”.
iii) She encouraged members of the Scheme to be open and deliberate accordingly to ensure accountability in governance.
iv) She noted that in Tanzania pension funds were lent to government which attracted good interest. The funds were borrowed to finance a lot of infrastructural work such as construction of roads and government houses. The Scheme could explore such ventures to ensure growth.
v) She indicated that it was very unfortunate that some members had refused to provide the necessary information required to update their files at the Scheme. This had caused a challenge of unpaid benefits.
vi) She looked forward to receiving the proposed amendments and assured that the Commission was committed to improve welfare of members. She promised to present the proposed amendments to the Parliamentary Commission for consideration as soon as she receives the proposal.
vii) She officially opened the 7th Annual General Meeting.
4.0 PRESENTATION BY INVESTMENT MANAGER, M/S GEN AFRICA ASSET MANAGERS AND STANLIB
a) Presentation by M/s Gen Africa Asset Managers
The Investment Reports were presented and considered. The highlights were as follows;
Mr. George Mulindwa from Gen Africa Asset Managers
i) Uganda’s economy expanded by 6.1% in the FY 2017/18 versus 3.9% in the FY 2016/17.
ii) The Uganda Shillings lost 7.5% in the FY 2016/17 to the United States Dollar due to changes in the economic environment.
iii) Kenya’s economic growth averaged 5.5% in the FY 2017/18 due to favorable weather conditions and the conclusion of the electioneering period in 2017.
iv) The Kenyan Shilling appreciated by 3.0% in the FY 2017/18 compared to a depreciation of 2.5% during the FY 2016/17.
v) Inflation declined to 5.3% in FY 2017/18 from 8.1% in FY 2016/17 due to lower food prices.
vi) The outlook was as follows;
• Both annual headline inflation and core inflation were forecast to rise due to rising fuel prices, new taxes and increased economic activity.
• The Central Bank raised its rate from 9.0% to 10.0% in its October 2018 triggered by inflationary expectations.
vii) The performance of the Equities market for the FY 2017/18 was as follows ;
Regional Equities
• NASI (14.0%), NSE 20 (-8.9%), LSI (12.1%), ALSI (24.5%).
• While companies may benefit from the improving economy in the second half of the year this may not be enough to turn around performance on the bourse on the Uganda Securities Exchange (USE). On the Nairobi Securities Exchange, recent tax measures contained in the Finance Act 2018 and the interest rate cap law may have a negative impact on a number of companies in the stock market.
viii) The portfolio performance as at 30th June 2018 was illustrated as in the table below;
|
Security Name |
Value as at 30th June 2018 |
% of Portfolio |
|
Regional Equities |
18,833,658,584 |
22.93% |
|
Local Equities |
5,235,182,332 |
6.37% |
|
Fixed Deposits |
3,871,933,380 |
4.71% |
|
Corporate Instruments |
212,714,158 |
0.26% |
|
Government Bonds |
45,563,594,071 |
55.47% |
|
Treasury Bills |
8,236,632,568 |
10.03% |
|
Cash and Cash Equivalent |
193,401,851 |
0.24% |
|
Grand Total |
82,147,116,944 |
100.00% |
ix) Growth in assets since inception was as follows;
|
Year |
Assets (Billions) |
|
June 2016 |
0 |
|
December 2016 |
19 |
|
June 2017 |
62 |
|
December 2017 |
74 |
|
June 2018 |
82 |
x) In terms of economic outlook, Gross Domestic Product was expected to grow at a rate of 6 – 7% over the FY 2018/19. Inflation which started to pick up in September 2018 poses a risk. Indicators of the contraction in economic and business activity are most likely to create an impact on rise of inflation.
b) Presentation by M/s Stanlib
i) Growth Domestic Product (GDP);
• Economic growth improved in FY 2017/18 compared to FY 2016/17 due to good harvests in the agricultural sector.
• The economy was expected to grow by 6% to 6.5% over the medium term supported by public investments in infrastructure and accommodative monetary policy pursued by Bank of Uganda.
• The rate of growth was 6.1% for the FY 2017/18.
Ms. Salima Nakiboneka from Stanlib Uganda
ii) Inflation;
• Inflation dropped in the financial year ended June 2018 supported by improved weather conditions that translated into low food prices.
• Headline inflation averaged at 3.4% in FY 2017/18 compared to 5.7 in FY 2016/17.
• Higher global oil prices led to rise in fuel prices in the second half of FY 2017/18.
iii) Currency;
• The Uganda Shilling weakened in the last quarter of FY 2017/18 driven by high demand for forex by importers and on interbank market.
• The local currency closed at 3,869 in June 2018 compared to 3,599 against the United States Dollar at the start of the financial year.
iv) Interest Rates;
• Interest rates rose in the last two months of the financial year as a result of the weakening of the shilling.
• The 91D, 182D and 365 day rates rose to 10.2%, 11.7% and 14.5% respectively compared to 9.6%, 10.1% and 11.4% at the beginning of the fiscal year.
• The 2 year, 5year and 10 year interest rates rose from 12.6%, 14.0% and 15% to 14.5%, 14.9% and 16.1% respectively.
v) Equity Markets;
• Market prices of Kenyan listed stocks dropped in the last quarter of FY 2017/18 driven by increased sell-offs by foreign investors.
• Performance at the Uganda Securities Exchange was supported by positive price performance on the banking sector stocks.
• Standard Chartered Bank, Bank of Baroda and DFCU rose by 19%, 39% and 28% respectively. UMEME share price fell by 29% during the 12 months to June 2018.
vi) The allocation of assets as at the end of the fourth quarter of 2017/18 was as follows;
|
Asset Class |
Allocation per Asset Class |
|
Government Securities |
62.2% |
|
Corporate Debt |
0.3% |
|
East African Equities |
19.6% |
|
Property (STANLIB Fahari REIT) |
0.3% |
|
Cash and Equivalents |
4.8% |
|
Fixed Deposits |
12.8% |
|
Total |
100% |
vii) The gross fund performance for the period February to June 2018 was as follows;
|
Asset Class |
Performance |
|
Kenya Equities |
10.1% |
|
Ugandan Equities |
25.9% |
|
Government Securities |
0.7% |
|
Corporate Bonds |
5.6% |
|
Fixed Deposits |
3.2% |
|
Total |
45.5% |
The performance was 3.8% which was above the benchmark of 2.7% by 1.8%.
ix) The Board set a strategic target of 11.5% after tax return on invested funds.
x) The outlook for FY 2018/19 was as follows;
• The economy was expected to continue recovering in FY 2018/19 supported by further public investments and accommodative monetary policy. Real GDP growth was expected to average at 6.3% in the medium term.
• Higher domestic borrowing, depreciating local currency and inflationary pressures from rising economic activity is likely to lead to a rise in interest rates during the financial year. Stanlib would continue to invest in high yielding fixed income securities.
• The continued recovery of regional economies was expected to support robust performance of the equity markets. The Fund Manager would continue to accumulate shares in companies with strong foundations.
• The fund was well diversified to take advantage of the various market cycles.
c) Presentation by the Custodian, M/s Standard Chartered Bank
i) The primary role of the Custodian bank was to;
• Hold in safekeeping the assets of the Scheme
• Maintain the position information on behalf of clients
• Facilitate trading
• Provide pricing information and
• Manage cash activity.
ii) The key responsibilities of the Custodian are as follows;
• Facilitate receipt of Scheme quarterly contributions.
• Monitor and settle depository transactions.
• Monitor and post income payments.
• Provide daily and /or monthly asset pricing
• Provide daily, monthly and quarterly reports.
• Facilitate payment of leave/withdrawal payments.
• Hold Scheme assets in custody.
iii) The appointment of a Custodian provides checks and balances among the service providers and also ensures compliance with the regulators.
iv) The summary of the Scheme Asset held by Investment Managers as at 30th June 2019 was as follows.
|
|
Gen Africa Asset Managers |
Stanlib |
|
Asset Class |
Value (UGX) |
Value (UGX) |
|
Cash |
63,749,213 |
4,733,992,539 |
|
Fixed Deposit |
3,871,933,380 |
13,839,043,014 |
|
Corporate debt |
210,708,643 |
316,062,964 |
|
Equities (USE) |
5,235,182,332 |
8,164,266,342 |
|
Equities (NSE) |
18,673,872,174 |
13,427,638,218 |
|
Stanlib Fahari REIT |
199,768,633 |
299,652,950 |
|
Government Bonds |
8,194,180,029 |
22,631,741,367 |
|
Government Bills |
42,160,179,952 |
42,594,133,074 |
|
Total |
78,609,574,355 |
106,006,530,468 |
6.0 PRESENTATION OF THE BOARD OF TRUSTEES REPORT
The report of the Board of Trustees for the year ending 30th June 2018 was presented, considered and adopted.
The following were the highlights of the report.
i) The Scheme had a Board of Trustees and four Board Committees namely; Finance and Administration Committee, Investment and Custody Committee, Audit and Risk Committee and Benefits Administration Committee.
ii) During the reporting period the Board of Trustees held 5 meetings, Finance and Administration Committee 7 meetings, Investment and Custody Committee 4 meetings, Audit and Risk Committee 9 meetings and Benefits Administration Committee 4 meetings.
iii) As at 30th June 2018, the Scheme had 842 active members (310 women and 532 men), 109 pensioners, 2 deferred members and 6 beneficiaries.
iv) The financial highlights were as follows;
• The Scheme assets grew from UgX.152.83 billion to UgX.204.55 billion posting a 33.8% rate of growth. The growth was attributed to reduced payouts made during the year.
• The growth in Members’ contributions was 2.90% compared to 11.6% the previous year.
• The return on investment was 11% compared to 12% the previous year.
• The Board of Trustees approved an interest of 10% per annum to be credited to the Members’ account. The Unisex Convention Annuity factors are used to compute pension for retiring members.
v) The Board appointed M/s Standard Chartered Bank to keep custody of all Scheme Assets.
vi) African Alliance, Stanlib and GenAfrica Asset Managers were responsible for the investment and management of the Scheme’s investment assets.
vii) Effective 1st July 2017, the Board commenced issuing of loans and a total of UgX.13, 107,280,000 was disbursed to 164 members. The return on the loan portfolio was UgX.1, 179,276,321 contributing 5.6% of the total investment income.
viii) During the Annual General Meeting held on 20th April 2018, the Board of Trustees declared an additional 3% interest for the financial year 2016/2017 over and above the 8% guaranteed interest. The pensioners pay was also adjusted for inflationary depreciation for the period 2015-2017. This additional declaration was equivalent to UgX 2,683,000,000 for active members and UgX. 52,996,663 for the Pensioners.
ix) In accordance with Section 71 of Uganda Retirement Benefits Regulatory Act, the Board conducted an Actuarial Valuation as at 30th June 2017 and the Scheme was found to be financially sound with a funding level of 105.8%. After the adjustment for an additional 3 % return was declared, the funding level reduced to 102.2%
7.0 PRESENTATION OF FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH JUNE 2018
The Finance Manager presented the Financial Statements of the Scheme.
Ms. Elsie Kizito Kisobooza, the Finance Manager presenting the Financial Statements
The following were the highlights of the presentation;
a) Statement of Changes in the Net Assets for the year ended June 30th, 2018.
|
|
30th June 2018 UGX |
30th June 2017 UGX |
|
Total Contributions |
36,405,333,207 |
35,380,757,436 |
|
Benefits paid to members |
(3,746,879,161) |
(2,051,330,950) |
|
Gross Investment Income |
20,922,274,173 |
17,013,747,378 |
|
Fund expenses |
(1,568,832,549) |
(1,085,406,980) |
|
Net Change Available for members before Tax and Guaranteed Interest |
55,717,760,697 |
53,182,906,855 |
|
Other Incomes |
2,743,180,781 |
2,730,616,569 |
|
Management expenses |
(2,846,654,736) |
(2,165,932,580) |
|
Net Administrative Surplus |
(103,473,955) |
564,683,988 |
b) Statement of Net Assets as at 30th June 2018.
|
|
30th June 2018 UGX |
30th June 2017 UGX |
|
Investments |
142,724,850,901 |
110,435,352,370 |
|
Property, Plant & Equipment |
315,010,114 |
231,305,351 |
|
Intangible Asset |
63,800,256 |
0 |
|
Total Current Assets |
64,652,736,529 |
44,631,410,456 |
|
Total Current Liabilities |
3,202,247,062 |
2,471,385,174 |
|
Net Total Assets |
204,554,150,738 |
152,826,683,003 |
c) The above assets were financed by;
|
|
30th June 2018 UGX |
30th June 2017 UGX |
|
Members Accumulated Fund |
203,773,888,071 |
152,131,344,122 |
|
Administrative Reserves |
589,565,479 |
693,039,434 |
|
Loan Protection Fund |
190,066,237 |
0 |
|
Deferred Income |
630,951 |
2,299,447 |
|
Total Net Assets |
204,554,150,738 |
152,826,683,003 |
d) Statement of the Cash Flow for the year ended 30th June, 2018
|
|
30th June 2018 UGX |
30th June 2017 UGX |
|
Net cash from operating activities |
34,867,094,055 |
34,660,166,775 |
|
Net cash used in investing activities |
(29,244,875,221) |
(40,769,362,711) |
|
Cash balance at start of year |
1,087,076,767 |
7,196,272,703 |
|
Cash balance |
6,709,295,601 |
1,087,076,767 |
8.0 PRESENTATION OF THE REPORT OF THE AUDITOR GENERAL
A report of the Audited Accounts of the Parliamentary Pension Scheme was presented by a representative of the Auditor General.
In the opinion of the Auditor General, the financial statements presented fairly in all material aspects the financial position of the Parliamentary Pension Scheme as at 30th June 2018 and of its financial performance for the year ended in accordance with international financial reporting standards, the Parliamentary Pensions Act 2007 and the Uganda Retirement Benefits Regulatory Authority Act 2011.
9.0 CONFIRMATION OF PREVIOUS MINUTES OF THE 6TH ANNUAL GENERAL MEETING
The minutes of the 6th Annual General Meeting were read, corrected and confirmed as a true record of what transpired during that meeting.
10.0 OBSERVATIONS /REACTIONS FROM MEMBERS
The following were the matters arising from the previous minutes and reactions from the presentations above.
The Rt. Hon. Speaker of Parliament with some of the Pensioners (Former Staff of the Parliamentary Commission)
i) Members requested for an update on the status of the proposal to uplift the welfare of former Members of Parliament who retired in 2011 and were earning meager pension.
It was reported that the Board engaged services of an Actuary to analyze and recommend scenarios to guide on pension enhancement. The Board however required intervention of the Sponsor (Parliamentary Commission) to facilitate the process.
In the same regard the Presidential pledge for old cadres who served under the National Resistance Movement (NRM) was being handled by the office of the Speaker. Relevant data had been computed to guide the process. The Scheme would avail additional input if contacted.
ii) Inquiry was made on the status of proposed amendments to the Parliamentary Pensions Act. They expected the amendment to address the loan threshold.
It was reported that the Board engaged URBRA on the amendments including enhancement of the loans portfolio. URBRA approved an administrative increase of 2%. The proposed amendments were ready and the Chairperson Board of Trustees would seek leave from the House to have these prepared and presented.
iii) The reports of service providers were not elaborate and clear to members. The reporting structure for service providers should be harmonized to ensure clarity and effective accountability to Members.
iv) GenAfrica Asset Managers had over invested in Government Securities to a tune of 65.6%. This could pose a risk to returns of the Scheme due to depreciation of the Ugandan shilling.
It was clarified that Investment Managers were required to give priority to risk free investments such as treasury bills and bonds to preserve Member savings/contributions. Investment decisions were guided by the investment policy statement which clearly stipulates permitted investment options.
Concern was further raised on the reduction of investments in regional equities on the Nairobi Securities Exchange by 22% yet these had a good return on investment.
The reduction in regional equities on the Nairobi Securities Exchange (NSE) was attributed to the effects of legislative power which impacted on performance within the Kenyan Market.
v) The interest rate of the Central Bank was at a low end of between 9-10%. The implication of this to the Scheme and individual plans was required.
It was explained that in 2012, a macro-economic tool was introduced to monitor and guide the market in controlling inflation. Increased costs in the economy trigger increase in interest rates across other banks. This implied Government would borrow at high rates negatively impacting on business.
vi) The Membership of the Board had a challenge of gender imbalance (2 ladies out of eight members) and no Muslim representative.
It was clarified that the Board currently had a member who was Muslim. Hon. Haruna Kyeyune Kasolo, a representative of the Ministry of Finance. By design the structure of the Board did not take care of diversity issues. The approved structure comprised the following representatives;
1) Parliamentary Commission
2) Member of the Opposition
3) Retired members of Parliament
4) Retired Staff of the Parliamentary Commission
5) Ruling Government Representative
6) Clerk to Parliament (Secretary to the Board)
7) Staff of the Parliamentary Commission
8) Representative from the Ministry of Finance, Planning and Economic Development.
In the above regard Members were requested to market the idea of religious and sex representation to the different constituencies to address diversity issues.
vii) The notice and documents for the Annual General meeting were delivered late to members. This formed part of the challenges raised during the previous Annual General Meetings. Management was tasked to address the anomalies during subsequent events.
Management apologized for the shortfalls and promised to explore alternative means possible to ensure timely communication and delivery of documents to Members for the Annual General Meetings.
viii) Poor attendance of Annual General Meetings had continued to be a challenge. It was proposed that sufficient transport refund be improvised to motivate members to attend. A date of Friday was also not favorable.
Members were informed that the Electoral Commission had communicated a road map for the next elections. Most Members travel to their constituencies on Fridays which coincided with the date for the event.
Although the rates of transport refund for active members and staff were still low, the rates for Pensioners were commensurate to distance of origin. Members were requested to mobilize sizeable numbers to attend during subsequent events.
ix) The status of medical insurance for pensioners was sought. It was clarified that under the low pension cannot be used to facilitate medical insurance. Members would be required to contribute towards the facility and the Sponsor requested to supplement. The law provides that the Board may however use a portion of a Members credit to pay medical bills in case of a major sickness. The request must be submitted by a recommended health facility.
x) Members requested to be furnished with the criterion used to coopt members to Board Committees. It was proposed that staff of the Parliamentary Commission with the relevant credentials be considered to reduce on expenses spent on Committee allowances.
Members were informed that the practice was already being done. A number of staff of the Parliamentary Commission had been coopted on Board Committees.
xi) Management expenses were very high as indicated on page 33 of the Annual report 2017-18. The Board had spent more on capacity development compared to staff.
The hike in management expenses was attributed to the frequent changes of Board membership and the legislative requirement for all Board members to undergo a Trustees Development course in Nairobi to acquire a practicing license.
xii) The possibility of members accessing full pension was sought. It was clarified that the law was very clear on how to access pension benefits. Members who exit at less than 45 years are paid all their money. Those who exit when they are above 45 years of age are entitled to 1/3rd of their savings and payment of monthly pension for 15 years.
xiii) Members were happy to note that the Board was working towards addressing the challenge of low pension income for those who retired in 2011. The Board was requested to put in more effort to ensure this challenge is addressed.
11.0 THE CHAIRPERSON’S CLOSING REMARKS
The Chairperson thanked Members’ for attending and actively participating in the session. He commended the Service Providers for all their contributions and continued support. The Chairperson finally thanked the Staff of the Scheme and the Trustees for the hard work exhibited in organizing the event.
The meeting was adjourned at 2:00 pm.