Shs170b set aside to boost savers’ interest - NSSF board

State minister for Planning Matia Kasaija (R) shakes hands with NSSF acting managing director Geraldine Ssali (L) as board Chairman Ivan Kyanyonka (2nd R) and Uganda Retirement Benefits Regulatory Authority board Chairman Andrew Kasirye look on. This was during the NSSF annual members’ meeting held in Kampala yesterday. PHOTO BY MICHAEL KAKUMIRIZI

What you need to know:

Perfomance. The fund annual income has grown form Shs490 billion in 2013 to Shs552 billion in 2014

About Shs170 billion has been put aside to absorb shocks that could eat into members’ savings, the acting managing director of National Social Security Fund (NSSF), Ms Geraldine Busuulwa Ssali, has disclosed.

This means no matter how the economy performs or no matter the loopholes the Fund encounters along the way, members’ savings will always attract interest that is above inflation.

Speaking at the NSSF annual members meeting yesterday, Ms Ssali said: “We will maintain returns every year even when the economy does not perform very well.”

She continued: “We have a surplus of Shs170 billion and when need be, we can have some of it added on the interest of the members if the economy doesn’t do well. We have a solid financial base.”

Ms Ssali further said compliance levels improved from 52 per cent in 2010, to 73 per cent in 2013 and they currently stand at 77 per cent in 2014. Contributions grew year on year at an average of 23 per cent, annual total contribution more than doubled from Shs295 billionn in 2010, to Shs553 billion in 2013, to Shs638 billion in 2014. “The Fund’s assets are more than adequate to cover member liabilities.

We don’t have significant external liabilities. Members’ claim against the Shs 4.4 trillion asset base stands at 98 percent. As per our promise, we shall continue to deliver competitive returns on investments to our members,” Ms Ssali said.

She also declared that in case the Fund wound up today all members would be paid up promptly with the board chairman, Mr Ivan Kyayonka, adding that the payment would include interest.
Mr Kyayonka said the Fund intends to take the interest rate beyond the two percent inflation rate, saying he is looking forward to taking it up to five percent above inflation.

Minister of Finance in charge of Planning Matia Kasaija said NSSF is moving on the right track urging employers to develop the social need of their employees in order to win their loyalty.
Meanwhile, the Auditor General, Mr John Muwanga gave the Fund a good bill of account, implying that the NSSF business is being run well and prudently.

NSSF awards compliant employers

NSSF also recognised and awarded the best employers in terms of compliance, basing on the Fund’s 360 degrees compliance check – payment of contributions for their employees.

In the gold category (more than Shs500m monthly contributions), Centenary Bank emerged winner while MTN Uganda and Civil Aviation Authority came second and third respectively.

Hima Cement won in the Silver category (Shs100m to Shs500m monthly contribution). Office of the Auditor General and Taso came second and third. In the Bronze category (below Shs100m monthly contributions), Vision Fund emerged the best, followed by Mairye Estates and Shoprite were the second runners up.

Fund’s asset base
The Fund’s current asset base of Shs4.4 trillion ($1.7 billion) as at June 30, 2014, outstrips NSSF Kenya which is at $1.6 billion and NSSF Tanzania at $1.3 billion.

Over the last five years, total income grew by 261 per cent. Annual income grew from Shs160 billion in 2010, to Shs490 billion in 2013 and it is at Shs552 billion in 2014. Fixed income securities returns averaged 14 per cent. Equities returns averaged 13 per cent and Real Estate returns averaged 6.5 percent.

NSSF recently announced interest rate of 11.5%, an increase from 11.23% paid last year.