NSSF’s Record-Breaking Payout: A Win for Savers, Economy, and Fund.

By Teddy Namayanja 

The National Social Security Fund (NSSF) made history on Thursday, September 26, 2024 when it announced an 11.5% interest rate payout, totaling a record-breaking Ugx 2 trillion, for the Financial Year 2023/24/. This milestone benefits over 2.3 million registered members with balances in their savings accounts. Minister of Finance Matia Kasaija proudly announced that this rate surpasses the 10-year average inflation rate of 4.2% and the 2023/24 inflation rate of 3.9%.

What does this mean for savers?

• Increased earnings: Savers will receive a significant boost in their savings, encouraging long-term investment and financial planning.
• Trust and confidence: The Fund’s consistent payout above inflation rates demonstrates its reliability and ability to grow members’ savings.

Impact on the economy:

• Stimulating growth: The Ugx 2 trillion payout, injects liquidity into the economy, potentially boosting consumer spending and economic activity.
• Financial inclusion: NSSF’s growth and expanded coverage can increase access to financial services for Uganda’s working population.

So, what contributed to this achievement? Several factors likely played a role:

•  Effective management: NSSF’s Managing Director Patrick Ayota’s leadership and strategic vision have driven the Fund’s growth.
•  Economic stability: A stable economy and low inflation rates have allowed NSSF to maintain a high interest rate.
•  Increased contributions: A 12.2% increase in member contributions from Ugx 1.72 trillion to Ugx 1.93 trillion.
•  Cost management: The cost of administration dropped from 1.02 to 1.00% of total assets.

NSSF’s future outlook:

• Vision 2035: The Fund aims to grow to Ugx 50 trillion, extend social security coverage to 50% of Uganda’s working population, and achieve 95% service satisfaction.
•  Voluntary products: The Ministry of Labour has concluded consultations to enable NSSF to roll out voluntary products, expanding its offerings and reach.

The National Social Security Fund (NSSF) is a multi-trillion fund that provides social security services to eligible employees in Uganda. It’s mandated by the government through the NSSF Act (Cap 230) and is known for being a secure, innovative, and dynamic social security provider.

Key Features of NSSF:

• Guaranteed Returns: NSSF guarantees a return on members’ savings of at least 2% above the 10-year inflation average.
• Asset Management: The Fund manages assets worth over Shs 22.1 trillion, invested in Fixed Income, Equities, and Real Estate assets within the East Africa region.
•  Policy Oversight: The Minister of Gender, Labor and Social Development, and the Minister of Finance, Planning and Economic Development are responsible for policy oversight of the Fund.
•  Contribution Structure: The Fund is a contributory scheme, funded by contributions from employees and employers of 5% and 10% respectively of the employee’s gross monthly wage.

The Fund aims to be the social security provider of choice, with a mission to be a relevant partner to its members through continuous innovation in the provision of social security.

By embracing Environmental, Social & Governance (ESG) principles and incorporating environmental stewardship, social responsibility, and economic resilience, NSSF has demonstrated its commitment to responsible investing. As the Fund continues to grow and innovate, its members and the broader economy are poised to benefit.

The NSSF’s impressive performance, under Managing Director Patrick Ayota’s leadership, solidifies its position as East Africa’s largest Fund by value. As the Fund continues to grow and innovate, its members and the broader economy are poised to benefit.

Compiled by Teddy Namayanja a reporter at SML NEWS UG. She’s a seasoned writer and passionate about business and public relations.