
NSSF will have to contend with competition from other investment vehicles that have built a large client base in the voluntary savings and investment space. Photo / File
If you have been following events at the National Social Security Fund (NSSF), you must have noticed an increase in questions such as “what more can you offer members beyond interest?”
Yes, in the last five years, the voices have become louder and a little demanding for something better than the usual.
Offering interest on savings and paying out benefits alone, seem not to cut it anymore for members and savers or those outside the Fund.
Indeed, the numbers in the voluntary saving space tell the story of an increasingly picky and savvy saver – with several alternatives - seeking to achieve particular milestones without waiting for retirement.
In its research in 2021, NSSF found that members needed more than the usual to address retirement fund needs such as education, health, and capital accumulation to start a business or seed acquisition.
“60 [percent] of our members told us they … wanted more voluntary options,” Patrick Ayota, the NSSF managing director, told a media briefing at the launch of Smartlife Flexi, a voluntary savings product provided under the recently gazetted NSSF (Voluntary Contributions and Benefits) Regulations, 2024, on Wednesday in Kampala.

Mr Patrick Ayota says 60 percent of NSSF members have said they want more voluntary options. Photo / File
Increasingly, NSSF has been facing some tough questions from the wider stakeholder audience, yet limitations of the law have allowed the Fund little space to maneuver.
Actually, the questions had never been tougher than during and after Covid-19 when savers wondered why NSSF would not structure a healthcare plan against member savings to save them from the nearly impossible and mounting hospital bills that had come with Covid-19.
It was then that the idea of a voluntary savings scheme was suggested and was eventually adopted and passed, together with others such as mid-term access, in the NSSF (Amendment) Act, 2022.
However, its implementation has been slow and sometimes lacking in terms of product plans, which has allowed other investment vehicles such as unit trusts, among others with clear products, to take charge of the voluntary saving and investment space.
Thus, NSSF will have to engage more than it has done previously to improve its current standing.
In a media briefing ahead of the annual members meeting for the period ended June 2024, NSSF indicated that it had accumulated more than 44,300 voluntary savers on its register.
However, in subsequent details, the Fund indicated that only 30,307 savers were active as of June 2024, holding accumulated savings of just Shs51.5b.
The Fund indicated further that targets under voluntary contributions for the year to June 2024, had fallen short, realizing just Shs18.9b against a target of Shs24b, due to delays in gazetting the NSSF (Voluntary Contributions and Benefits) Regulations.
Perhaps, with the regulations now gazetted, we could be reading a different story in the next few years.
However, this will not come easily given the attractive offers by alternative investment vehicles such as collective investment schemes or unit trusts, which have a good return on investment, flexible terms, and have built a solid asset base running in trillions of shillings.
For instance, unit trusts have in the last four years convinced a large chunk of voluntary savers and investors to join their ranks, accumulating trillions of shillings in assets under management.
In its report for the three months to September 2024, Capital Markets Authority indicates that collective investment schemes, which are largely composed of unit trusts, had registered a 10.5 percent growth in assets under management, which rose to Shs3.5 trillion from Shs3.17 trillion in the quarter to June 2024.
The report further indicates that the Shs3.5 trillion was held in 103,950 funded accounts, which had grown by 12.8 percent from 92,165 in the three months to June 2024.
The growth and holdings under collective investment schemes, when compared, dwarf those of NSSF’s voluntary savings, but the Fund could leverage its legacy portfolio, which has grown to above Shs22 trillion, to recruit new or muscle savers from existing investment vehicles.
There are at least six collective investment schemes, including Old Mutual Investment, ICEA Lion, Sanlam Investments, Britam Asset Managers, SBG Securities, and XENO Investment.
However, Old Mutual and ICEA Lion, which share between them an investment portfolio of Shs2.88 trillion, control 82.2 percent of total assets under management in the collective investment schemes space.
But, beyond unit trusts, NSSF will also have to contend with competition for savers in the voluntary saving space, with fixed deposits and dollar investments, among others.

NSSF has put in place a strategy that will help it to fully implement its voluntary savings scheme. Photo / Edgar R Batte
NSSF’s new strategy in the voluntary saving space
NSSF says Smartlife Flexi has been built to address member needs and flexibility to enable savers to choose mid to long-term saving goals such as education, health, and capital accumulation.
“In developing this product, we considered flexibility, affordability, and choice for the saver. The return is computed on a daily balance but credited every month. Although the minimum lock-in period is one year, early exit is permitted with minimal withdrawal costs,” Mr Ayota says.
In its new strategy, NSSF seeks to exploit gaps in the voluntary savings space to achieve its Vision 2035 by increasing social security coverage to at least 50 percent of Uganda’s working population, grow the Fund’s assets to Shs50 trillion, and achieve a 95 percent member satisfaction rate by 2035.
Apart from voluntary saving products, NSSF also plans to, through the Diaspora Connect, develop products for voluntary members living abroad to contribute to their retirement savings.
The Fund hopes to spread its reach and expand member numbers from the current 2.3 million, the majority of whom are in the formal sector.
Ayota says informal sector workers have been left out of the social security and protection net, yet they contribute significantly to Uganda’s gross domestic product.
Thus, through the Smartlife, savers aged 16 and above, both within and beyond Uganda, will have an opportunity to be part of Uganda’s largest pension fund, by saving for defined periods and goals and will have an option to choose how much, and when to save, and for how long.
Dr David Ogong, the NSSF chairman, said that the launch of the new innovation provides Ugandans with greater convenience and flexibility to save while offering a competitive return.