Uganda Retirement Benefits Regulatory Authority (Merger and Winding Up of Retirement Benefits Schemes) Regulations

Every scheme shall maintain a prudent level of funding, as shall be determined by the trustees.

In determining the funding requirements of a scheme, the trustees shall seek direction from-

A scheme shall not be deemed to maintain a prudent level of funding where-

The trustees shall submit to the Authority, the report of the funding ratio determined by the actuary or financial advisor as the case may be.

The report referred to in subregulation (4) shall be accompanied by-

Where the Authority is of the opinion that a scheme has failed to maintain a prudent level of funding, the Authority shall direct the scheme to submit a remedial plan within thirty days from the date of the directive.

where the Authority is satisfied with the arrangements set out in the remedial plan referred to in subregulation (1), the Authority shall approve the remedial plan and permit the scheme to implement the remedial plan.

Where the Authority is not satisfied with the arrangements set out in the remedial plan referred to in subregulation (1), the Authority may-

The remedial plan referred to in regulation 5 shall contain- (a) the asset and liability structure of the scheme; (b) the risk profile of the scheme; (c) the liquidity requirements of the scheme; (d) the age profile of the members of the scheme;

The remedial plan submitted to the Authority shall be accompanied by- (a) a summary of the valuation report of the actuary or the financial advisor regardless of whether or not the plan was prepared or amended after the valuation of the scheme by the actuary or financial advisor; (b) an explanation for amendment of the plan, where the plan has been amended under the circumstances set out in regulation 7; (c) a certification of the remedial plan set out in Schedule 4 to these Regulations; (d) a duly completed agreement to the remedial plan of the sponsor set out in Schedule 5 to these Regulations; and (e) any other information that the Authority may require.

The trustees of a scheme may with the approval of the Authority, amend a remedial plan of the scheme.

The trustees of a scheme shall amend a remedial plan for purposes of compliance with regulation 6 of these Regulations.

The Authority may require the scheme to submit periodic reports of the prudent level of funding and the implementation of the remedial plan of the scheme.

Where the Authority is satisfied that the remedial plan is adequate and the prudent level of funding of the scheme has been restored, the Authority shall terminate the obligations of the scheme in respect of the remedial plan and inform the trustees of that scheme accordingly.

Where the Authority finds that the scheme has failed to maintain a prudent level of funding, despite implementing the remedial plan, the Authority may exercise any of the measures set out in regulation 5(3).

Where under regulation 5(2)(b) and (c), the Authority appoints an inspector or interim administrator, the inspector or the interim administrator, as the case may be, shall submit a report of the findings of the examination accordingly.

The Chief Executive Officer of the Authority shall, upon receipt of the report from the inspector or the interim administrator, make recommendation to the Board, for a decision on the matter.

Where the Board makes a decision to wind up a scheme, the winding up of the scheme shall be made in accordance with regulations 12 and 15 of these Regulations.

The trustees of two or more schemes may resolve to merge the schemes in accordance with these regulations.

A scheme may acquire an existing scheme.

The trustees of the merging schemes and the trustees of an acquiring scheme, shall apply to the Authority for approval of the merger or the acquisition, as the case may be.

Where a scheme is acquired by an existing scheme the assets of the acquired scheme shall be transferred to the acquiring scheme.

An application for a merger of schemes or acquisition of a scheme shall be accompanied by a report consisting of-

Where two or more schemes merge to form a new scheme, the assets of all the schemes shall be transferred into the new scheme.

Subject to the provisions of the Act and these Regulations, the trustees of a scheme may by special resolution, resolve to voluntarily wind up the scheme under circumstances specified in the trust deed and the rules of the scheme. (2) The trustees may resolve to wind up a scheme for any other reason approved by the Authority. (3) The winding up of a scheme that has failed to maintain a prudent level of funding shall be done in accordance with regulation 15. (4) A scheme shall not be wound up voluntarily without the prior express approval of the Authority.

Where the trustees of the scheme resolve to voluntarily wind up the scheme, the trustees shall submit to the Authority, an application to wind up the scheme voluntarily.

The application for the voluntary winding up of a scheme shall be in form of a letter requesting that the scheme be wound up voluntarily, accompanied by a statement of the reasons for winding up, signed by all the trustees of the affected scheme. (3) The application shall be accompanied by- (a) a resolution to voluntarily wind up the scheme duly signed by the trustees; (b) a statement indicating the assets, liabilities and funding ratio of the scheme dated not more than thirty days before the application to wind up was made; (c) details of the members of the scheme containing their names, gender, age and other necessary information; (d) details of all the arrangements made for transfer of the accrued benefits of the members of the scheme to another scheme; (e) a statement confirming that the trustees of a scheme are satisfied that all existing liabilities and obligations to the members of that scheme can be met from the assets of the other scheme; and (f) any other information relevant to the application to voluntarily wind up the scheme. (4) The Authority may request the trustees for more information in respect of the application to voluntarily wind up a scheme.

The Authority may approve the voluntary winding up of a scheme without the appointment of a liquidator, where the Authority is satisfied that- (a) appropriate arrangements have been made for the realisation and disposal of the assets of that scheme; (b) appropriate arrangements have been made for payment of the accrued benefits to existing members of that scheme or the transfer of the accrued benefits of the existing members of the scheme to another scheme;

Where the Authority approves the voluntary winding up of a scheme, the Authority shall- (a) issue a written approval to the trustees; and (b) set up conditions of the voluntary winding up that the Authority deems appropriate.

The trustees shall, within five days from the date on which the application for voluntary winding up of the scheme is approved by the Authority- (a) serve a notice of the voluntary winding up of the scheme to each member of the scheme; (b) serve a notice of the voluntary winding up of the scheme to the sponsor or the participating employers in the scheme, as the case may be; (c) publish the notice of the voluntary winding up of the scheme in a newspaper of wide circulation in Uganda, in the case of a scheme receiving mandatory contributions; and

The notice of the voluntary winding up of the scheme referred to in subregulation (1) shall state- (a) the reasons for the voluntary winding up of the scheme; (b) that the Authority has approved the voluntary winding up of the scheme; (c) the conditions set by the Authority with regard to the voluntary winding up of the scheme; (d) the name and address of the liquidator, where a liquidator has been appointed; and (e) the date on which the process of the voluntary winding up of the scheme is scheduled to commence.

The notices referred to in this regulation, shall be in English.

The Authority may apply to court for an order to wind up a scheme.

The Authority shall, prior to filing an application under subregulation (1), notify the trustees in writing of the intention to apply to court for an order to wind up the scheme and shall give the trustees an opportunity to be heard on the matter of winding up of the scheme.

The Authority may apply to court for an order to wind up a scheme where-

An application by the Authority to wind up a scheme by order of court shall be preceded by a resolution of the Board, signed by all the members of the Board.

An application to court for an order to wind up a scheme under regulation 17 shall be accompanied by- (a) a resolution of the Board referred to in regulation 18(2); and (b) a report stating- (i) the reasons for making the application to wind up the scheme; (ii) the assets, liabilities and the funding ratio of the scheme, as at a date not later than thirty days before the application to wind up the scheme was made; (iii) a list of the members of the scheme; and

The Authority may employ the services of an actuary or other qualified financial advisor, at its own expense or at the expense of the scheme, for purpose of complying with subregulation (1) (b).

The court may grant an order to wind up a scheme without appointing a liquidator where, the court is satisfied that- (a) the scheme has a funding ratio that is greater than or equal to one hundred percent of the benefits payment obligations of the scheme; (b) where there are assets to be realised, appropriate arrangement has been made for the realisation and disposal of those assets; (c) there are no assets of the scheme to be realised and disposed of; (d) there are no existing scheme members; or (e) where there are existing scheme members, that appropriate arrangements have been made for the transfer of the accrued benefits of the members of the scheme to another scheme.

The court shall appoint a liquidator where the circumstances of the scheme do not warrant court to grant an order for winding up a scheme without appointing a liquidator. (3) An order of court for winding up of a scheme under subregulation (1) shall state- (a) whether the winding up is to be done by a liquidator or without a liquidator; (b) the date on which the scheme is to be wound up; and (c) any other matter that the court deems necessary.

The Authority shall within five days after grant of an order by court to wind up the scheme-

The notice referred to in subregulation (1) shall- (a) state the reasons for winding up the scheme; (b) state that the court has ordered that the scheme be wound up; (c) state the conditions imposed by the court in respect of the winding up of the scheme; (d) state the name and address of the liquidator appointed to conduct the winding up of the scheme, where a liquidator has been appointed; and (e) state the date on which the process of winding up of the scheme will commence.

A person may be appointed as a liquidator under these Regulations, if that person is qualified to be appointed as a liquidator under the Insolvency Act, 2011.

A liquidator appointed for purposes of these regulations shall- (a) not have provided professional services to the scheme for a period of not less than five years before the scheduled date of winding up of the scheme; (b) not have been sentenced to imprisonment for a period of six months or more by court;

The fees payable to the liquidator shall be borne- (a) by the scheme in the case of voluntary winding up; and (b) by the Authority in the case of winding up by order of court, where the Authority applies for the winding up of the scheme.

Where necessary, a performance guarantee for the payment of the expenses of the liquidator and to indemnify the liquidator against any loss and the expenses incurred in the winding up of the scheme shall be submitted by-

The performance guarantee referred to in subregulation (2) shall be issued by an authorised financial institution.

Upon the appointment of a liquidator to wind up a scheme- (a) the liquidator shall have all the authority that the trustees have in relation to the scheme, in the ordinary course of business;

The liquidator shall take reasonable steps to take possession of the assets of the scheme, within thirty days from the date of his or her appointment.

The liquidator shall require the trustees, fund manager, custodian or administrator of the scheme, to transfer to him or her, any assets of the scheme in the possession of the trustees, fund manager, custodian or administrator, within reasonable time as specified by the liquidator.

The liquidator appointed shall have the power to- (a) realise the assets of the scheme by public auction or private contract; (b) transfer the assets of the scheme to another scheme, an individual person or sell them in parcels; (c) bring or defend any legal proceedings in the name and on behalf of the trustees of the scheme; (d) enter into an arrangement with respect to a debt, claim or liability relating to the assets of the scheme; (e) engage the services of other professionals to assist him or her in the performance of his or her duties; (f) pay or transfer, the accrued benefits of the members of the scheme in accordance with the Act; (g) transfer any paid contributions or assets of the scheme to a licensed scheme as directed by the Authority; and

The liquidator may ask for direction from the Authority with respect to the conduct of the winding up of the scheme.

The liquidator or trustee as the case may be shall, within thirty days from the date referred to in regulation 26, submit to the Authority the report of the preliminary accounts, signed and certified by the liquidator or the trustee as the case may be, as a correct record of the assets and liabilities of the scheme at the onset of the process of winding up of the scheme.

The Authority may, at the cost of the scheme, direct the liquidator or trustee, to commission an independent actuary or financial advisor approved by the Authority, to prepare a report of the preliminary accounts of the scheme.

The report of the preliminary accounts referred to in subregulation (1) shall be accompanied by a report indicating the manner in which- (a) the assets of the scheme are to be realised; and

The Authority may publish in a newspaper of wide circulation, a notice stating the period and place where the report of the preliminary accounts referred to in regulation 27(1) may be placed for inspection.

A person who objects to the report of the preliminary accounts, shall put his or her objection in writing and deliver it to the Authority or at the offices of the scheme, within fourteen days from the date of publication of the report.

A person that objects to the report of the preliminary accounts shall serve his or her objection to the liquidator or trustees as the case may be, within fourteen days from the last day of inspection of the preliminary accounts.

Where no objection is lodged against the report of the preliminary accounts, the Authority shall direct the liquidator or trustees to complete the process of winding up the scheme.

Where an objection to the report of the preliminary accounts is lodged, the Authority may, after considering the objection, direct the liquidator or trustee to- (a) amend the preliminary accounts; or (b) issue any other directive that is not inconsistent with the Act, these Regulations, the rules of the scheme and the order of court.

The liquidator or trustee shall, within fourteen days of receipt of the directive from the Authority referred to in subregulation (5)(a), provide a copy of the amended preliminary accounts and report to every member and creditor of the scheme.

A liquidator, trustee or a person aggrieved with the directive of the Authority issued under subregulation (5), may apply to the Appeals Tribunal established under section 83 of the Act, for an order to set aside the directive of the Authority.

The application referred to in subregulation (7) shall be made within thirty days from the date of receipt of the directive by the liquidator or trustees.

The liquidator or trustees shall submit to the Authority, a report on matters relating to the winding up of the scheme, including information on compliance with the directives issued by the Authority to the liquidator, in respect of the winding up of the scheme.

The liquidator or trustee, shall submit to the Authority, the report referred to in subregulation (1), within fourteen days from the date specified in the notice of approval of the winding up of the scheme by the Authority or from the date specified in the order of court.

The Authority may remove a liquidator or trustee that fails, without reasonable excuse, to comply with the requirements or directives of the Authority.

The liquidator or trustee may by formal application seek for direction from the Authority or from court, in the course of winding up a scheme. (2) Where the liquidator or trustee makes an application for direction from the Authority or from court in the course of winding up the scheme, the liquidator or trustee shall inform the trustees and members about the application for direction.

The trustees or members may make a response to the application for direction by the liquidator.

The trustees or members, shall submit the response referred to in subregulation (3), to the Authority or to court within fifteen days from the date of receipt of the notification of the application for direction by the liquidator.

Where the trustees or members submit a response referred to in subregulation (3), the Authority or the court as the case may be, shall consider the response and take a decision.

Where the trustees or members, do not submit a response to the application under subregulation (3) within the time specified in subregulation (4), the Authority or the court as the case may be, shall proceed to give direction to the liquidator or trustees.

Upon completion of winding up of the scheme, the benefits of a member of the scheme that is still employed by the scheme sponsor, shall be transferred to the scheme of choice of that member.

The members of a scheme shall be treated as deferred creditors and the claims of those members against the scheme, shall not be settled until the debts of the ordinary creditors of the scheme have been fully settled.

Upon commencement of the winding up of the scheme, the trustees or liquidator shall not admit new members to the scheme and shall not manage the affairs of the scheme, except in so far as may be required for winding up of the scheme.

Subject to subregulation (1), the legal status of the scheme shall continue, until its wound up, notwithstanding any provision to the contrary in the trust deed and rules of the scheme.

Where the Authority is satisfied that the final accounts are correct and that the winding up process has been completed, the Authority shall-

upon revocation of the licence referred to in paragraph (b), the scheme shall be dissolved.

Upon dissolution of the scheme and subject to the Civil Procedure and Limitation (Miscellaneous Provisions) Act Cap 72, no claim shall lie against the trustees, liquidator or the Authority with respect to the payment of benefits under the wound up scheme.

Upon the appointment of a liquidator, any person that purports to exercise or perform a function of the scheme without the permission of the liquidator, commits an offence and is liable on conviction to a fine not exceeding seventy-five currency points or to imprisonment for a term not exceeding one year or both.

A person who, without reasonable excuse, fails to comply with the requirement of the liquidator commits an offence and is liable on conviction to a fine not exceeding seventy-five currency points or to imprisonment for a term not exceeding one year or both.

A person who makes a false or misleading statement in a material respect in a document given to the liquidator, commits an offence and is liable on conviction, to a fine not exceeding seventy five currency points or imprisonment not exceeding one year, or both.

A person who contravenes a provision of these Regulations for which no express penalty is stated, commits an offence and is, on conviction, liable to a fine not exceeding seventy-five currency points or to imprisonment for one year, or both.

A person who continuously contravenes these Regulations is liable, in the case of the continuing contravention, to an additional penalty not exceeding fifty currency points in respect of each day for which the contravention continues.

Where the contravention of these regulations is committed by a body corporate, the body corporate, and officers of the body corporate or any person that purports to act in the capacity of the body corporate, or that had knowledge or believed to have had knowledge of the commission of the offence and did not exercise due diligence to ensure compliance with these Regulations shall be deemed to have committed an offence and shall be liable on conviction to a fine not exceeding seventy five currency points or to imprisonment for one year and in case of a continuing contravention, an additional penalty of fifty currency points in respect of each day on which the offence continues.