Only 3.01m Ugandans have retirement benefit plans

URBRA says the largest number of members under pension schemes comes from NSSF. Photo / File 

What you need to know:

  • Of the 3.01 million, NSSF has the largest share, which stands at 2.21 million members. NSSF is followed by Public Service Pension Scheme, which has 410,000 members

A report by Uganda Retirement Benefits Regulatory Authority (URBRA) indicates that slightly more than three million Ugandans (3.01 million) have retirement benefits arrangements, majority of whom are private formal sector workers covered under the National Social Security Fund (NSSF). 

The details, which are contained in the Annual Retirement Benefits Sector Report 2021/22 financial year, indicate that the three millions are just a fraction of about 23.54 million Ugandans, who are in the working age bracket. 

Of the 3.01 million membership, NSSF has the largest share of 2.21 million members, which is followed by Public Service Pension Scheme with 410,000. 

The Parliamentary Pension Scheme and Makerere University Retirement Benefits Scheme have 1,220 and 7,162 members, respectively, while voluntary segregated occupational and umbrella schemes have 51,375.  

Government also provides social assistance to 332,793 senior citizens through the Social Assistance Grant for Empowerment (SAGE).   

However, the report does not indicate how many, of 3.01 million members, are active. 

NSSF recently reported that the Fund, as of December 2020, had 902,844 active mandatory members and 31,146 under the voluntary scheme, while 675,000 member accounts had remained inactive for more than a year by December 2020.      

The URBRA report, which highlights the performance of the pension sector indicates that during the period, assets under the pension sector increased to Shs19.9 trillion, mainly on account of contributions worth Shs1.8 trillion and investment income, which grew to Shs2.1 trillion.  The sector generated an average return on investment of 11.4 percent, thus enabling retirement schemes to declare an average interest rate of 11 percent. 

During the period, total contributions increased by 8 percent to Shs1.8 trillion from Shs1.7 trillion with contributions from employers and employees accounting for 66.2 percent and 33.4 percent respectively, while additional voluntary contributions accounted for 0.13 percent and group transfers 0.36 percent.

The increment in contributions was attributed to new member registrations, increase in contribution rates, and payment of outstanding contributions by employers. 

However, the growth, which stood at 8 percent, was less than the 13.8 percent five-year annual average contributions growth prior to Covid-19, which largely impacted employer compliance, remuneration and loss of jobs.

In notes published together with the report, Martin Anthony Nsubuga, URBRA chief executive officer, in addition to the good performance, had in its tenth year of operation, developed Regulations for the Assignment of Retirement Benefits for Mortgages and Loans, a blueprint that will be key in the establishment of the national long-term saving scheme for non-salaried workers. 

During the period under review, URBRA indicated that total benefits paid to members and beneficiaries stood at Shs1.4 trillion, of which Shs441b or 32 percent of the total benefits paid out was on account of mid-term benefits. 

The Shs1.4 trillion was an increase of 53 percent from Shs894b that was paid out during the 2020/21 financial year.