Richard Byarugaba, the Managing Director of the National Social Security Fund (NSSF) has blamed the lowest interest for savers in FY2021/22 on low returns due to huge mid-term payout.
Byarugaba told the 10th Annual General Meeting that sat Serena Hotel that the mid-term payout amounted to a whooping Shs421Bn.
NSSF on Tuesday announced a 9.65% for the FY2021/22 a rate even lower than the 12.5% members earned last year.
Byaruhanga noted that while they would have managed to earn an extra 0.96%, “the market had lost its value, especially in the neighboring country of Kenya coupled with a loss in the stock exchange fair valuation which would have added them an extra 1.5%
“The effects of the global Geo- politics affected regional markets, economy, and Fund,” he said
“Our growth was slower on contributions, compliance rates dropping, real estate products becoming more expensive and equally affecting our equity portfolio though remained resilient,” he added.
According to Byarugaba, if the two (0.69% and 1.75%), were put together then they would have declared a 12.09%, “which would have been comparable to what was declared last year,”
The mid-term payout, he said cost the Fund almost 0.69% and the market 1.75%, “thus ended up declaring 9.65%,”
Despite announcing fluctuating interest, NSSF had never announced a figure which is below 10%.
For example in 2012 the interest rate was 10.00%, 11.23% in 2013, 11.50% in 2014, 13.00% in 2015, 12.30% in 2016, 11.23% in 2017, 15% in 2018, 11% in 2019, 10.75% in 2020 and 12.15% in 2021.
On her side, Hon Betty Amongi the Minister of Gender, Labour and Social Development said that the annual members meeting was a forum that gave an opportunity for members to give ideas on how to manage their funds and also give feedback on the management, performance and strategic expectation for next financial year
In this Amongi added that it was only befitting that members considered their NSSF saving as their last resort however much there was room for the mid-term access to fund
Henry Musasizi, the State Minister of general Duties at the Ministry of Finance, Planning and Economic Development instead commended the Fund for its commitment to the implementation of the new NSSF Amendment Act which saw the rolling out of over Shs443Billion to over 21,700 qualifying members and yet stayed resilient
Musasizi noted that there has been a growth of 11% in assets between Shs15.6Tn and Shs17.3Tn.
“The Fund continues to ensure that members’ money is protected against inflation, this principle is at the heart of the fiduciary responsibility,” Musasizi said
