KAMPALA – The National Social Security Fund (NSSF) will pay an interest rate of 10% to its members for the Financial Year 2022/2023.
The 10% interest, which equals a total of Shs1.591 trillion, was declared by the Minister of Finance, Matia Kasaija, at the NSSF 11th Annual Members’ Meeting on Tuesday, 26 September 2023.
“In accordance with section 35(2) of the NSSF Act, as amended, I hereby declare an interest rate of 10% As provided for in the NSSF Act, as amended, this new rate will be calculated and credited to the balance outstanding on the members’ accounts as of 1st July 2022,” Kasaija said.
“This new rate equals UGX 1.591 trillion shillings in total. Last Financial Year, the 10-year average rate of inflation was 4.2%. The rate I have just declared is 5.8% above the 10-year average, which means that the Fund has once again delivered on its promise and surpassed it by almost 3.8%. To the members, thank you for trusting the NSSF with your money. The Fund is an institution we are proud of,” he added.
The Fund declared an interest rate of 9.5 percent in the financial year 2021/2022 down from 12.5 percent it declared in the previous year.
Earlier, Peter Kimbowa, NSSF Board chairman, had announced that the Fund’s total realised income increased by 15% from Ugx 1.9 trillion in the Financial Year 2022/22 to Ugx 2.2 trillion in the Financial Year 2022/23.
Benefits paid to qualifying members increased by 1% from Ugx 1.189 trillion in the Financial Year 2021/22 to Ugx 1.199 trillion in the Financial Year 2022/23.
The cost-to-income ratio improved from 11.7% in the Financial Year 2021/22 to 9.4% in the Financial Year 2022/23 Cost Management – our cost of administration reduced from 1.18% of total assets to 1.02%.
“NSSF is committed to broad value creation; value beyond numbers. On that note, we are launching our first Sustainability Report, which is integral to our strategy, which is working with the community,” Kimbowa said.
Patrick Ayota, the NSSF MD, said despite the internal disruptions, the Fund remained strong and resilient.
“Last year, members entrusted us with UGX 1.5 trillion. This year, that number went up by UGX 200 billion to UGX 1.7 trillion,” he said.
Ayota said the Fund has 2.20 million registered members; 1.6 million have a balance, and 704,000 are active.
He also assured the savers that their savings are secure.
“The model is simple. We collect 5% from you and 10% from your employer. Then we invest it in real estate 9%, equities 13% and fixed-income 78%. 78% means that if NSSF closed today, we would pay 78% of our members within three months,” Ayota said.
“NSSF’s vision is to be the social security provider of choice. It’s important that we have the word choice there because, in our minds, we want when someone saves with NSSF, and they go back to bed, they say thank God, I saved with NSSF,” he added.
The Minister of Gender, Labour and Social Development, Betty Amongi, who co-supervises NSSF with the Minister of Finance, hailed the Fund for remaining resilient amid the difficult economic conditions in the country over the last year.
She, however, challenged the Fund to innovate and create more value for members’ savings.
“We must keep doing what we are doing very well but be brave enough to embrace and seek out new opportunities. For instance, how can the Fund innovate around health and childcare benefits, education, and insurance solutions that offer protection across the lifecycles of members and their dependents?,” she wondered.
“How can the Fund play a more active role in providing opportunities to the farmer, a market vendor, women, and youth groups to improve their ability to access social protection? Fortunately, the law gives the NSSF Board of Directors latitude to provide solutions to the challenge I have put forward,” she said.
Martin A. Nsubuga, the CEO of Uganda Retirement Benefits Regulatory Authority (URBRA), said return benefit schemes today hold UGX 21.6 trillion of assets, of which NSSF holds UGX 18.5 trillion while occupational schemes hold 3.1 trillion.
“We continue to remind members that retirement savings are long-term; likewise investment decisions should be long-term in nature. Unfortunately, this market is dominated by short-termism that determines decision-making,” he said.