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NSSF savers to get money in bits
What you need to know:
- Benefits in instalment. A survey among 45-60 year-old members shows 62 per cent said they would consider receiving their benefits in instalments.
Kampala. Retirees can now withdraw savings in instalments, National Social Security Fund (NSSF) has announced.
NSSF came up with a “Draw Down payment plan” following a survey amongst 45-60 year-old members where 62 per cent said they would consider payment of their benefits in instalments.
In Kampala on Wednesday, Mr Patrick Ayota, NSSF deputy managing director, said the solution will provide income security to retirees.
“It will allow qualifying members the option of receiving their benefits while retaining a balance of their savings with the Fund,” Mr Ayota said.
Members
There will be chance for members to determine the portions they want to receive while the balance will be paid to them twice a year.
Mr Ayota urged members to take on the payment plan which he says is a boost to members’ savings.
“Eligible members will earn annual interest on their written balance as will be declared each year, having a cushion against losses arising from rushed investment decisions and maintaining a cash flow pattern that they may have been familiar with while in employment,” he said.
NSSF noted that the retained savings will create a bigger pool of funds from which it can invest and multiply members’ fortunes.
“If one quarter of the Fund chooses to leave their money behind, that would be a good thing for us,” Mr Ayota said.
Assets
The Fund’s assets are mainly apportioned to fixed income investments, private equity and real estate.
The Fund ended the year with its fixed income assets at 75 per cent, equity at 18.09 per cent and real estate at 6.53 per cent.
NSSF’s desired target is to have 70 per cent of its assets allocated to fixed income assets, 25 per cent to businesses (equity) and 5 per cent to real estate.
Today, NSSF pays an average of Shs22.3b to qualifying members each month. Previous practice only allowed members to receive their savings in a lump sum.
Hitherto the survey, NSSF had frequently received requests from qualifying members to pay them a portion of their savings.
The payment plan will be initially accessed by members who qualify for age and withdraw benefits. This means to enjoy the plan, one must be either 55 years or 50 years but out of employment or working in public service, respectively.
National Social Security Fund (NSSF) paid out Shs360b as benefits to members in the 2017/18 financial year, a 29 per cent increase from the Shs278b paid out in the same period last year.
Another survey of its members shows that more than 70 per cent who had taken their savings in their entirety had depleted them within two years.
