KAMPALA-The National Social Security Fund (NSSF) has declared 9.65% as interest rate for the fund’s savers for FY2021/2022.
The rate that has been declared is down from 12.15% that was declared for FY 2020/2021 and translates into a total of UGX 1.3trillion to be credited to members’ accounts.
While addressing stakeholders at the NSSF 1oth Annual members meeting, the fund’s Managing Director Richard Byarugaba noted that the effects of the global geo-politics affected regional markets, the economy and the fund which justifies the low interest rate.
“Our growth was slower on contributions, compliance rates dropped, real estate products became more expensive and our equity portfolio was affected, however, we remained resilient,” he explained.
He revealed that the fund invests member savings in among others fixed income, equities and real estate from which revenue is generated which runs the fund and the rest given to members as interest.
He has however been positive that the fund has sufficient assets to cover its liabilities thus making it solvent.
“The good news is that our fund is still sustainable. Our fund is still liquid because our member fund has increased to UGX 16.96 trillion, and our total assets are at UGX 17.25 trillion. This growth is consistent with the combined growth in investments driven by contributions and income generated net of benefits paid out,” he said.
According to Mr Byarugaba, contributions only grew by 9% as voluntary contributions grew by 5000 new members on the employee side and 1000 members on the employer side.
He also said that in a bid to accelerate their agenda through the Hi-Innovator program, the fund has been able to create over 1300 jobs, 700 entrepreneurs as well as provided financial literacy.
The Minister of State for Finance (General Duties) Henry Musasizi commended the fund for remaining resilient despite turmoil in the business world on the global and domestic stages.
“Good governance is important for institutions in Uganda and also in the private sector to grow and for public confidence especially financial institutions like NSSF,” he said.
Mr Musasizi further commended the fund for its commitment to implementation of the new NSSF Amendment Act by rolling out the midterm access benefit.
“The fund has paid out midterm benefits amounting to over UGX 443bilion to over 21,700 qualifying members,”
He noted that the Fund continues to ensure that members’ money is protected against inflation.
“I am happy to note that despite the challenges in its operating environment, the fund has consistently surpassed its target of a return that is above the 10 year average rate of inflation,” said Musasizi.
Hon Becky Amongi, Minister of Gender, Labour and Social Development revealed that due to economic turbulence, they were forced to enact a law that opened midterm access which has contributed to lowering the interest rate.
“NSSF is a social security fund and not a bank where you can withdraw money anytime. I advise members to consider their NSSF savings as the last option even though the law now opens access to midterm benefits,” she said.
The Auditor General Mr John F.S Muwanga confirmed his audit of the fund’s financial statements of net assets available for benefits and statements for changes in net assets available for benefits.
“In my opinion, the financial statements present a true and fair view of the financial position of the fund at June 30, 2022 and of its financial performance and its cash flows for the year ended. In accordance with the international financial reporting standards and in the manner required by UBRA Act and NSSF Act, I believe that the audit evidence I have achieved is sufficient and appropriate to provide a basis for my opinion,” he said.
