By Our Business Reporter
The National Social Security Fund (NSSF) has announced 12.15 percent interest payment to its members for the Financial Year 2020/21.
The interest which was welcomed by members as a good return on their savings given the covid -19 pandemic was announcement by Finance Minister Matia Kasaija in Kampala at the NSSF member’s Annual General Meeting.
The minister said the current interest rate, equivalent to ShS1.52 trillion, will be credited to members’ accounts in the month of October as the tradition has been over the years .
“In exercise of the powers conferred on me by section 35 of the NSSF Act, I hereby declare an interest rate of 12.15% to be paid as interest to the members of the fund for 2020/21. I would like to congratulate the staff at the fund for preserving the savings of the members. As I conclude please save money. Ugandans we have a bad savings culture but we need to change. Please save money,” Mr Kasaija said.
In 2019/20 NSSF paid Shs496.4 billion to qualifying members, which increased to Shs642.3 billion in 2020/21 as the world battled the Covid -19 pandemic that has left over a million people dead and shattered businesses following prolonged lockdowns stem the spread of the deadly virus .
The Fund managers have promised to beat the 10-year average inflation rate in payments to the members. The Fund has paid above 10 percent over the past decade making NSSF one of the safest and profitable invesment fund in Uganda.
Like most businesses, NSSF saw a dip in income last financial year as many companies, in which it is invested across the region, slashed or withheld dividend payments in response to the uncertainty caused by Covid-19.
In financial performance report , Managing Director Richard Byarugaba said NSSF’s had registered an increased income of 25 percent bringing in Shs1.8 trillion in the just-ended financial year. He attributed the encouraging performance to the higher returns on treasury bonds, property sales and a recovery in dividend payments by companies in which it is invested.
NSSF grew its assets base from Shs13.3 trillion to 15.5trillion partly on the back of increased contributions from increased compliance and growing confidence. This year-on-year increase was close to the 17 percent increase in the previous reporting period reflecting the resilience of contributions and the performance of the fund. The Fund has a target to grow assets under management to Shs20 trillion by 2025.
During the financial year 2020/21, NSSF’s interest income grew from Shs1.4 trillion to Shs1.6 trillion while dividend income grew from Shs62.2b to Shs7.49b. Real estate income grew to Shs53.5b up from Shs11.1b.
NSSF has the largest investment portfolio in Uganda with 78 per cent invested in fixed income while 15 percent is invested in equities and 7 percent in real estate.