By Our Reporters.
The National Social Security Fund (NSSF) has announced a 12.15 percent interest payment to its members for the Financial Year 2020/21. This is an increase from the 11.3 previous paid up having dropped from 15 per cent in 2018.
Finance Minister Hon Matia Kasaija said the current interest rate, equivalent to UshS1.52 trillion, will be credited immediately to the members’ accounts.
The National Social Security Fund (NSSF) on September 29, 2021 announced 12.15 percent interest payment to its members for the Financial Year 2020/21.
The interest announcement by Finance Minister Matia Kasaija in Kampala at NSSF member’s Annual General Meeting, is a reflection of a strong resilience by the Fund defying effects of the coronavirus pandemic.
“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. ,” he said.
The Minister said Ugandans have a bad saving culture and hastened to add that the bad culture should 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 on the back of an increase in the number of claimants and invalidity benefit paid to members affected by the coronavirus.
NSSF is the biggest investor on the local securities exchange but is also a significant equity investor on the Nairobi Securities Exchange as well as the exchanges in Dar es Salaam and Kigali.
The Fund has pledged to beat the 10-year average inflation rate in its return to members, by at least two percentage points, which currently works out at about eight per cent. The Fund has paid above 10 percent over the past decade and has outperformed bank savings deposit rates and average returns on residential real estate.
NSSF suffered a slump in income last financial year as many companies, in which it is invested across the region, reduced or withheld dividend payments in response to the uncertainty caused by Covid-19 now ravaging the world.NSSF Managing Director Mr Richard Byarugaba said in finacial results that NSSF’s income had increased by 25 percent to Shs1.8 trillion in the just-ended financial year.
He attributed the upward trend in income to higher returns on treasury bonds, property sales and a recovery in dividend payments by companies where the fund has invested.
The results showed that NSSF grew its assets base from Shs13.3 trillion to 15.5 trillion partly on the back of increased contributions from increased compliance and growing confidence.
The progressive year-on-year increase was close to the 17 percent increase in the previous reporting period that reflects the resilience of contributions and the performance of the fund. NSSF 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.
National Organisation of Trade Unions (NOTU) Chairman Gneral Mr Usher Wilson Owere and Central Organisation of Free Trade Unions (COFTU) General General Mr John Oketcho welcomed the 12.15 interest rate to be paid to savers as a move in the right direction. . ■