Technology has disrupted a number of businesses, however, in the social security sector it is vice versa.
To be specific, digital services have resulted into higher compliance with a number of employers making timely remittances, according to National Social Security Fund (NSSF), deputy managing director, Mr Patrick Ayota.
Initially, there was a two-step process that required employers to submit a paper with a list of employees to NSSF after which contributions were submitted to the bank.
“About five years ago, compliance levels were hovering around 70 per cent and now those numbers are hitting towards 85 per cent because it has been easier for employers to submit their contributions,” he says.
About 55,000 Ugandans now access social security services electronically. NSSF has seen a reduction from 32,000 branch walk-ins to 22,000 per month.
NSSF’s technological drive is part of a move to maximise revenues and deliver services cheaply, efforts that reduce administrative costs.
“We are right around a Shs10 trillion today. For a similar sized Fund globally, the cost of administration is 2.2 per cent of that asset base. NSSF is doing it at 1.29 per cent. Part of what is helping us drive that cost is the ability to give our members services at a low cost and in a convenient manner,” Mr Ayota said.
He made the remarks on Monday at the launch of an upgraded the NSSF Go App in Kampala.
The NSSF Go App originally launched in 2014, is a mobile application through which NSSF members can access selected services and keep track of their savings at their convenience.
NSSF currently has 1.6 million contributors. Majority of these are between 28 and 40 years, which means that the Fund has ample time to grow such people’s contributions before they hit 55 years – the age at which they claim their savings.
This can be done through annual interest earning as the Fund makes money of its equity investments and expanded operations.
For years, NSSF has been Uganda’s equity investor, owning substantial shares in a number of companies such as Umeme, Uganda Clays, Stanbic Bank and Dfcu Bank, among others.
In August, NSSF announced a 15 per cent interest on the account a profitable year that had seen the Fund hit the Shs1 trillion in terms of member contributions.
According to the Fund’s financial performance for 2017/18, contributions hit Shs1.05 trillion up from Shs917b the previous year.
This was the first time that contributions crossed the over a trillion threshold.
In 2017, NSSF launched a voluntary membership scheme to recruit clients from the informal sector to rope in more members.
WHAT’S IN FOR MEMBERS?
As a member using the App, you will now have full visibility of the status of your contributions so you can track and know when an employer has not remitted your money for a particular month.
You then should be able to raise a complaint through a relationship manager provided for by the App. You will be able to access your e-statement just to see your entire saving history. You will also be able to do scenario planning as the new App shows projected balance you will have at any age at a specific interest based on your current salary.
“You now have an opportunity to play with some parametres. Suppose the interest rate is 6 per cent and suppose you need to retire in 10 years, how much money will you have? What it does is it brings the future into your control. If you are going to have Shs200 million but realise you need to have Shs400m, you can do something about it basing on the scenario features we have,” Mr Brian Tindimwebwa, NSSF Applications Specialist said.