The National Social Security Fund (NSSF) will pay its savers an interest rate of 13% for the Financial Year 2014/15, which translates to Shs514 billion in monetary terms, the Minister of Finance, Planning and Economic Development Hon Matia Kasaija announced today at a press conference held at the NSSF Workers House in Kampala.
This is an increase from 11.5%, about Ushs 366 billion, the Fund paid last year.
It means that savers of the Fund will earn Ushs 144 billion more this year compared to Ushs 88 billion increment the last financial year.
It also implies that for every Ushs1 million a member held in the Fund at the end of July 1, 2014, he or she will receive Ushs130,000 as interest on his or her account.
Hon Kasaija said; “I would like commend NSSF for living up to its promise of delivering competitive returns to its members. The interest rate I have declared today is above the 8.86% which is the 10-year average inflation rate, this is evidence that NSSF is growing the value of its members’ savings. The rate will be calculated and credited on the balance on the members’ accounts as at 1st July 2014”.
He attributed the increase in member’s interest rate to the Fund’s improved financial performance, arising out of strategic exploitation of the investment environment within the region, despite the modest growth in the economy over the same period.
NSSF Managing Director Richard Byarugaba said that the Fund’s performance, had improved significantly in comparison to the previous financial year.
“We have also surpassed most of our targets for the last Financial Year. Overall, our investments performed better as a result of our aggressive but judicious investments strategy, contributions increased because more people are saving with the Fund and we managed our costs better. We are focused on prudently managing the savings of our members by providing a competitive return without compromising the safety and security of their savings,” he said.
He said that the Fund’s balance sheet grew by 27% for the financial year 2014/2015 from Ushs 4.40 trillion to Ushs 5.58 trillion last year.
Total income increased by 35% to Ushs 807 billion from 597 billion last year.
“The increase in income was primarily driven by favourable interest rate regime and better performance of our equity investments. For instance, our dividend income increased from Ushs 13 billion in 2013/2014 to 34 billion in 2014/2015,” he said.
Byarugaba also said that the Fund managed its costs better, in 2014/2015.
“This is an area where we have improved. The significant rise in income was not accompanied by a rise in costs. Our cost to income ratio for Financial Year 2014/2015 stood at 13.1%, which is above our target. This means that we are able to give our members a competitive return,” he said.
He added that the Fund’s customers appreciate the significant improvements across the board – customer satisfaction improved to 88% in 2014/2015 from 84% the previous year.
The Fund currently has more than 1.6 million members, of whom about 600,000 actively contribute every month.