While some politicians are inciting younger Ugandan workers to agitate to withdraw a fifth of their retirement savings prematurely from the National Social Security Fund, it emerges that thousands of senior citizens who have already attained the retirement age are smartly staying put, refusing to claim the benefits already due to them.
Of the NSSF’s one and a half million members, 49,350 who have attained the age of 55 years at which they should be withdrawing their benefits have declined to withdraw from the membership alongside with their savings. Data obtained from the Fund indicates that these 69,350 senior citizens own a whopping sh463billion in savings, which constitutes 3.5% of the total worth of the fund estimated at sh13trillion.
While a more deeper data mining into these savers’ profiles would tend towards intrusion, it is clear that their average individual savings in the fund are about ten million shillings. These retirees’ decision in recent years not to withdraw their benefits from NSSF is easy to understand. All of them must have seen some of those who retired before them and rushed to claim their benefits but did not benefit much in the different ventures they invested in. While taking risk is essential to succeed in business, clearly, teaching old dogs new tricks rarely works. And it has been the case with many retirees who take their life’s savings at age 55 years and risk them into a business they know next to nothing about.
Many have ended in great loss, unfortunately too quickly. Secondly, if one claimed their benefits and deposited them in a bank, it would be a self-inflicted loss, since there is no Ugandan bank saving scheme that can currently earn the saver more than NSSF would pay them in interest. So without going through the speculative hassle of aiming at the moving target of treasury bills and bonds, one can get a good or better deal by leaving their money in NSSF.
And here is what the really smart-prudent seniors do: They just leave their principal benefit sum in NSSF and then just keep collecting their interest – quietly!
