✳ Year – Interest
2012 ✅10.00%
2013 ✅11.23%
2014 ✅11.50%
2015 ✅13.00%
2016 ✅12.30%
2017 ✅11.23%
2018 ✅ 15%
2019 ✅ 11%
2020 ✅ 10.75%
2021 ✅ 12.15%
2022 ✅ 09.65%
2023 ✅ 10.00%
URBRA warns of low coverage in the retirement benefits sector and calls for effective policy responses to it from government
Kampala, Uganda | THE INDEPENDENT | The National Social Security Fund (NSSF) has today declared an interest rate of 10% on member savings for the financial year 2022/23, translating into UGX 1.591 trillion that will be credited to member accounts immediately. All members have this afternoon received an SMS indicating their accounts have been credited.
The interest rate that is higher than last financial year’s 9.65%, was announced byMatia Kasaija, the Minister of Finance, Planning and Economic Development at the Fund’s 11th Annual Members Meeting held at the Kampala Serena Hotel this morning.
Kasaija commended the Fund for posting a remarkable performance on almost all the Key Performance Indicators despite a challenging environment characterized by turmoil in Europe due to the Russia -Ukraine war, the investor flight from most of the developing markets back to the US, reduction in value across all East African stock markets and the increased scrutiny that the Fund underwent in the 3rd quarter of the just concluded Financial year.
“I am especially glad that the Fund’s assets registered growth again from UGX 17.26 trillion in Financial Year 2021/22 to UGX 18.56 trillion in Financial Year 2023/24. Many naysayers did not imagine the possibility of growing this Fund to UGX 20 trillion. That you will achieve that strategic objective a year ahead of schedule is laudable,” Kasaija said.
He added, “The second KPI I am interested in is the money you generated during the year because that shows the productivity of the investments that I approved during the year. I am therefore glad that the total realised income earned increased by 15% from Ugx 1.9 trillion in the Financial Year 2021/22 to Ugx 2.2 trillion in the Financial Year 2022/23.”
The interest rate 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%. 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.
Martin Nsubuga, CEO of the Uganda Retirement Benefits Regulatory Authority (URBRA) noted NSSF’s consistent upward performance in the past decade.
“Retirement Benefits schemes today hold UGX21.6 trillion of assets Under Management, of which NSSF holds UGX18.5 trillion, while other occupational schemes hold UGX3tn. It should be noted that NSSF has been in existence since 1985, but growth has mostly escalated in the last ten years,” Nsubuga said
“Similarly, the growth we see in occupational schemes has mostly shot up in the past 9 years. This not only reflects adherence to the regulatory requirements, but also indicates a great market potential, if nurtured and well-supervised.”
Nsubuga, CEO of the sector regulatory authority, warned of the effects of low coverage in retirement benefits. He cuationed that “without an urgent and effective policy response to the situation, Uganda’s current and future retirees will wallow in old-age poverty.”
“As at June 2023, retirement benefits sector coverage was 14 % of the working population. This is based on the new Population estimates of Uganda’s labour force issued by UBOS in 2023. There is urgent need to address the issue of exclusion from the retirement benefits arrangement. ”
Betty Amongi, the Minister of Gender, Labour and Social Development also lauded the Fund’s performance but challenged it to create more solutions that will further address social protection in line with the International Labour Organization, the global body charged with developing international policies and programmes to improve working and living conditions worldwide.
She promised to fast track and issue regulations to operationalize several benefits/ products that the Fund was innovating to provide more value to members beyond a good return.
Patrick Ayota, the Fund’s Managing Director who presented the Fund’s performance results at the meeting, also highlighted its sustainability agenda that included support to local entrepreneurs to scale and create jobs as well as the Fund’s interventions in health and education.
Financial Year 2023/24 Performance Summary
✳ Assets Under Management (AUM) increased by 7.5% from UGX 17.26 trillion in Financial Year 2021/22 to UGX 18.56 trillion in Financial Year 2023/24.
✳ Member contributions increased by 15.4% from Ugx 1.49 trillion in Financial Year 2021/22 to Ugx 1.72 trillion in Financial Year 2022/23
✳ Total Realised Income earned 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%.
✳ Rate of Compliance slightly improved from 55% in Financial Year 2021/22 to 57% in Financial Year 2022/23
✳ Customer Satisfaction increased from 83% in the Financial Year 2021/22 to 86% in the Financial Year 2022/23
✳Staff Satisfaction slightly reduced from 85% in the Financial Year 2021/22 to 82% in the Financial Year 2022/23
**More details on the Fund’s sustainability agenda and financial performance report can be found in its annual report that was launched by the NSSF Board Chairman, Dr. Peter Kimbowa earlier at the Annual Members Meeting. It can be accessed on the Fund’s website www.nssfug.org