The Independent Uganda: You get the Truth we Pay the Price
Kampala, Uganda | THE INDEPENDENT & URN | The National Social Security Fund (NSSF), has reported a drop in the number of savers seeking to withdraw their accrued benefits across all categories.
The fund on Tuesday presented its performance report for the year ending 30th June 2024. From the report, it was revealed the need for savers to withdraw their benefits, dropped by 3,865 applications, which reduced the amount of money paid out within the same period.
“Benefits paid slightly reduced from Ugx 1.199 trillion in the Financial Year 2022/23 to Ugx 1.120 trillion in the Financial Year 2023/24. The reduction was driven by a drop in the number of people who claimed benefits from 48,115 in the Financial Year 2022/23 to 44,250 in Financial Year 2023/24,” reads part of the report.
According to the report, midterm benefit payments dropped from Ugx 272.2 billion to Ugx 176.6 billion. This has been the lowest payout in this category since the law allowed savers to access their benefits intermediaries.
During the release of the report, NSSF Managing Director Patrick Ayota noted that “People who qualify to withdraw their savings are opting not to because they trust the Fund to not only ensure safety but also growth in value of their money. This is a responsibility we do not take for granted.”
The report further notes that the fund’s income, increased by 15 percent, from 2.2 trillion to 2.53 trillion Shillings. Ayota attributed the growth to an increase in interest income earnings, dividend income as well as real estate income.
“Income from all three asset classes we invest in increased this last Financial Year compared to the previous one. Interest income increased from UGX 2 trillion to 2.34 trillion, dividend income from our listed and unlisted equities increased from UGX 145.1 billion to 175 billion and income from our Real Estate investments also increased from UGX 11.9 billion to 13.3 billion,” he said.
It’s showtime! Join us live now for our FY 2023/24 Performance Review. Let’s dive into the numbers together. #AMM2024 #NSSFPerformance https://t.co/qfgKVbyj5Z
— NSSF Uganda (@nssfug) September 17, 2024
He added that the Fund’s performance mirrors an improvement in the overall investment environment in Uganda and across East Africa.
“Our analysis shows that although it was not without challenges, across East Africa, it was a better year compared to the Financial Year 2022/2023. The Ugandan economy recovered and recorded a 6% growth in GDP, inflation remained under control, regional stock markets recovered and the interest rates slightly increased,” he said.
The Uganda Shilling appreciated against regional currencies except for the Kenya Shilling. Exchange rate movements are a source of return to the portfolio. The recovery of the KES boosted foreign currency gains in the portfolio. #AMM2024 #NSSFPerformance pic.twitter.com/OunUK1E84L
— NSSF Uganda (@nssfug) September 17, 2024
In addition to growth in its revenue, the Fund had a better year across other key performance indicators, including growth in assets under management, contributions collected, benefits paid, and cost management.
“During the year, we recorded a milestone in asset growth, achieving our target of growing the Fund to UGX 20 trillion by 2025 more than a year in advance. Our assets under management as of the end of June 2024 stood at UGX 22.13 trillion, an increase of 19.2% compared to the previous year. We still hold our top position as the largest Fund by value in East Africa,” Ayota said.
The Fund’s member contributions increased by 12.2% from 1.72 trillion in the Financial Year 2022/23 to 1.93 trillion Shillings in the Financial Year 2023/24 and the cost of administration dropped from 1.02 to 1.00 percent of total assets,” he added.
He further noted that the fund has embarked on Vision 2035 which includes growing the Fund to UGX 50 trillion, extending social security coverage to 50% of Uganda’s working population, and ensuring service levels satisfaction of 95%, all by 2035.
NSSF’s total assets amount to 22.13 trillion Shillings, of which 79.2% is invested in fixed income, 13.1% in equities, and 7.7% in real estate.
The cost-to-income ratio saw a slight rise from 8.66% in FY 2022/23 to 8.77% in FY 2023/24, although cost management efforts resulted in a reduction of the cost of administration from 1.02% to 1.00% of total assets. The compliance rate remained steady at 57% during FY 2023/24.
“Given the improved performance, I am extremely confident that the Fund will pay a competitive interest rate for the Financial Year 2023/24 as will be declared by the Minister of Finance, Planning and Economic Development at the 12th Annual Members Meeting next week,” Ayota concluded.
The National Social Security Fund (NSSF) Uganda is a multi-trillion Fund mandated by the Government through the NSSF Act, as amended, to provide social security services to all eligible employees in Uganda.
The Fund is a contributory scheme and is funded by contributions from employees and employers of 5% and 10% respectively of the employee’s gross monthly wage. The Fund is regulated by the Uganda Retirement Benefits Regulatory Authority while the Minister of Gender, Labour & Social Development, and the Minister of Finance, Planning & Economic Development are responsible for policy oversight
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