NSSF To Pay 10% INTEREST TO workers
NSSF Board Chairman Ivan Kyayonka (L), Maria Kiwanuka Minister of Finance (M) and Richard Byarugaba (R) unveil this year’s interest rate (Picture by Moses Ssemakula)
Workers now have a reason to smile after the National Social Security Fund (NSSF) declared 10% interest to all its members. This is in line with the Fund’s objective of creating value for its contributing members, the Minister of Finance, Planning and Economic Development, Maria Kiwanuka announced.
The announcement follows a statutory instrument she signed, in accordance with the Section 35(2) of the National Social Security Fund Act (Cap222), which mandates the Minister to declare the interest to the members after consultation with the NSSF Board. Kiwanuka attributed the increase, from 6% paid last Financial Year, to improved financial performance.
“The investment environment was favourable compared to the previous year especially the high interest rates regime. For instance, the Fund earned Shs264 billion from interest on its fixed income portfolio compared to Shs 133 billion the previous year,” she said.
She added that the Fund’s cost control measures have also significantly improved, with the overall expenses reducing by 10% and the Cost Income Ratio (CIR) improved from 37% to 22%.
Kiwanuka noted that the Fund also had considerably larger pool of funds as a result of increased member contributions and prudent management of the costs.
The Chairman of the Board of Directors, Ivan Kyayonka, said that the Fund exercised a more prudent investment approach in order to minimise risk and preserve the value of members’ funds.
He further said that the Board’s focus is to create value for NSSF members. “Our cardinal responsibility as a Board is to ensure that the funds are invested in projects that give a good return to our members. As trustees of the Members’ Fund, it is incumbent upon us not to erode the value of their savings.”
Commenting on the overall performance of the Fund, Managing Director Richard Byarugaba said that in the last one year, NSSF recorded significant improvements across its entire business spectrum.
“I am pleased to inform our members and the general public that the Fund is in robust financial health. We have grown the members’ fund from Shs2.0 trillion to Shs2.6 trillion in just 12 months,” he said.
NSSF Performance for Financial Year 2011/2012
- Amount of interest credited on Members Accounts grew by 106% from Shs,94 Bn in Financial Year 2010/2011 to UGX 202 Bn in Financial Year 2011/2012
- Benefits paid to members grew by 28% from Shs 79 Bn in FY 2010/2011 to shs 102 Bn in Financial Year 2011/2012
- Total contributions grew by 18% from Shs 388 Bn in Financial Year 2010/2011 to Shs461 Bn in Financial Year 2011/2012
- Revenues grew by 108% from Shs 158 Bn in Financial Year 2010/2011 to Shs329 Bn in Financial Year 2011/2012
- Fund assets grew by 29% from Shs 2.1 trillion in Financial Year 2010/2011 to Shs2.7 trillion in Financial Year 2011/2012
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It is good though it has to bring in more stringent mechanism to clamp down companies which do not remit employees money or companies which remit inconsistently and not the true value.
Good to hear that though I still miss Jamwa’s short lived period with 14%. As a contributor it is obvious that 14% interest is better that 10%.
Thanks Richard and Team for the outstanding performance!
We look forward to your new products to enable members access part of their savings
before the statutory age.
We strongly object to conversion of the fund to a pension scheme benefiting surviving pensioners unless it is opened to pensioners dependants for a specified period.