The future is bright with NSSF-Uganda

NSSF MD Richard Byaruhanga delivers a presentation at the first Annual Members Meeting recently.

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By Samuel Sanya

National Social Security Fund (NSSF) recently held the first annual members’ meeting in the fund’s 46-year history at the Serena Hotel, Kampala.

This was to reaffi rm a commitment to be the more customer-centric as the new dawn of pension’s sector liberalisation emerges.

“We are not merely changing our look and feel, but rather, the change of our visual identity symbolises my commitment, your commitment and our commitment to deliver a better future for our growing membership,” said Richard Byarugaba, NSSF’s managing director.

He explained that this is done by providing quality products, great customer service and offering competitive returns in a transparent and efficient environment.

The fund is friendlier and more open through a relationship management strategy that has increased compliance to 73% from 63%, while monthly contributions have hit sh50b from sh28b.

Monthly benefits paid out have grown from sh9b to sh12b. Average benefits processing time has improved from 105 days to the current 18 days with a target of lowering the processing time to 5 days.

Twenty eight companies received accolades for remitting employee contributions in full and on time and for complying with NSSF policies.

Companies that were awarded include TASO Soroti, Busitema University, Action Against Hunger –Kaabong, UCU Bishop Barham University, Lacor Hospital Gulu, North West Medical Teams, Baylor College of Medicines, Mcleod Russel Uganda Limited-Bugambe and Kakira Sugar Works.

Charles Bakkabulindi, the sports minister and workers’ representative, noted that there were several working Ugandans that were still not served by the fund.

He urged the fund to engage firms that are not remitting full employee contributions.

“While the companies have remitted contributions, the workers must receive a larger applause, since they are responsible for the actual production,” explained.

All Ugandan employers with more than five workers are required to remit 15% of each employee’s monthly salary to the fund as social security savings to be redeemed upon retirement, which is set at 55 years.

The fund’s balance sheet has grown by 76% to sh3trillion in the last year. The fund is collecting over sh130b each month from treasury bills, interest payments and member contributions.

Byarugaba noted that an agreement with the Public Procurement and Disposal of Assets Authority (PPDA) to have a third party agency handle the funds procurement function, will unlock value in the fund’s real estate holdings.

Projects

Over 5,000 housing units have been planned for the Temangalo land and 3,000 housing units on the Lubowa estates. The fund intends to open up an investment firm to invest in Kenyan equities and government securities.

The fund has invested over sh1.6 trillion in government treasury bonds and sh717b in fixed deposits with commercial banks.

It has acquired major stakes in companies such as Stanbic Bank, Bank of Baroda, Dfcu Bank, Umeme, Uganda Clays, and Centum.

Ivan Kyayonka, the fund’s chairman noted that the impending pension’s sector liberalisation will provide opportunities to launch new products to members improve internal controls and diversify investments.

“Pensions sector liberalisation is an opportunity for us to be more open and more accountable. We are working with the regulator to create new products and our short term target is to provide returns that are 2% above inflation consistently,” he said.

Kyayonka added that in the long term, they intend to provide a return higher than the commercial banks. “We want to put our members at the centre of everything we do.”

With liabilities of just sh60b and assets worth sh3trillion, the fund has more than liquidity to meet its obligations in the short and long run.

Aston Kajara, the state finance and investment minister noted that with the passing into law of the Retirement Benefits Liberalisation Bill, the countrywide coverage, experience, sophisticated systems will see the NSSF remain a dominant force in the pensions long after its monopoly ends.

“It is up to you members who contribute to this fund, who are actually the shareholders, to ensure that fund is as robust as it is, even when competition sets in,” he said.