The National Social Security Fund (NSSF) announced on Friday that it will pay an interest of 12.3% on its member’s contributions for the 2015/2016 financial year – lower than the 13% paid for financial year 2014/2015.
In total, the fund will pay Shs606 billion to its members, an increase of 17% from the Shs516 billion paid for the 2014/15 financial year.
The Minister of Finance, Matia Kasaija, said the lower rate is reasonable given the “tough investment climate” the fund operated in the past financial year.
“The rate this year is above the 10-year average rate of inflation, now at 8.85%, against which the fund rates itself, meaning that NSSF is indeed growing the value of its members’ savings,” Kasaija said.
NSSF’s managing director, Richard Byarugaba, cited the decline of stock markets across the region, the shilling’s volatility, and uncertainty around February’s general elections for the fall in the fund’s performance.
The fund’s assets rose 18% in 2015/16 from Shs5,600 billion to Shs6,500 billion, which Byarugaba attributed to growth in member contributions and investment returns. Contributions increased to Shs785 billion from Shs688 billion in 2014/15, a growth of 14%. Realised revenue rose 21% to Shs708 billion from Shs583 due to improved bond yields and dividend income from stock market investments. Treasury yields also rose above 17% versus last year’s 16.7%.
Profit after tax was Shs491 billion versus Shs647 billion in 2014/15, a 31.77% decline. Profitability was driven by good returns from fixed income investments and a 14% increase in member contributions, from Shs688 billion to Shs785 billion.
NSSF will hold its annual members meeting on 12 October at the Kampala Serena Hotel where it will release its financial statements for the year ended 30 June, 2016 and give an outlook for the current financial year.