NSSF has seen growth in benefits withdrawals amid falling revenue and member registration. PHOTO/FILE
The pension sector suffered relapsed growth during March 2021 with contributory schemes registering an increase in withdrawals and a reduction in contributions.
This, according to a policy brief authored by the Ministry of Finance for the period ended March meant that pension schemes posted a reduction in investment income amid an increase in withdrawal of benefits.
For instance, according to data from Uganda Retirement Benefits Regulatory Authority (URBRA) during the period, National Social Security Fund (NSSF), experienced a significant increase in withdrawal of benefits payments and a reduction in assets held by umbrella schemes.
During the period ended March
31, according to NSSF’s financial results, a total of Shs558b was paid
out in benefits compared to Shs430.5b in the same period ended March
2020, which represented a 29.6 per cent growth.
Of Shs558b, 98 per cent was paid to living members while 2 per cent was paid out as survivor benefits.
During the period under review, the Fund registered a decline in income, which fell to Shs31.1b compared to Shs35.2b in March 2020.
According to URBRA, assets of umbrella schemes, which play a key role in the performance of the pension sector, registered a 0.6 per cent decline due to a significant growth in outflows that exceeded growth in both investment income and contributions.
URBRA noted that more than Shs20b was withdrawn during February to March.
During
March, the Ministry of Finance noted a sharp increase in new business
registrations from 1,614 in January to 5,073 in March 2021.
The increase was attributed to a return in investor confidence with the Uganda Securities Exchange recording an upward movement in All Share Index from 1,314 in January to 1,390.6 in March.
The Ministry also noted a reduction in the trade balance deficit, which reduced by 10 per cent from $196.8m in January to $178.1m in February due to a 9 per cent increase in exports from $410.4m in January to $447.1m in February.
During the period, micro economic growth noted a deeper growth in the telecommunications sector with more than 50 per cent of the Ugandans owning a mobile phone.
Mobile phone subscriptions posted a year-on-year growth of 4 per cent, occasioned by the recovery of the economy compared to the pre-Covid-19 period.
Internet subscriptions also rose in the same period to 21.4 million subscribers, posting an Internet penetration rate of 66.78 per cent in December 2020.
Broadband traffic grew by 11 per cent on a quarter-to-quarter (from 59 billion MBs in September 2020 to 71.5 billion MBs recorded in December 2020).
The report also noted an increase in domestic voice traffic to 5.2 billion minutes in December 2020.
Benefits paid
During
the period ended March 31, according to NSSF’s financial results, a
total of Shs558b was paid out in benefits compared to Shs430.5b in the
same period ended March 2020, which represented a 29.6 per cent growth.
Of Shs558b, 98 per cent was paid to living members while 2 per cent was paid out as survivor benefits.
editorial@ug.nationmedia.com
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