The National Social Security Fund (NSSF) has announced that its revenues for the financial year ended June 30, 2023 witnessed a growth of 15%, surging from Shs1.9 trillion to Shs2.2 trillion.
Dividend income exhibited substantial growth, expanding from Shs84 billion to Shs139 billion. Furthermore, the income generated from the Fund’s real estate projects experienced a modest uptick, moving from Shs13.4 billion to Shs14 billion, accompanied by Shs16 billion in other income.
Addressing the media in Kampala on Wednesday, 20 September 2023, NSSF Managing Director Patrick Ayota said the Total Realized Income earned increased by 15% from Shs1.9 trillion in the Financial Year 2022/22 to Ugx 2.2 trillion in the Financial Year 2022/23.
He said the Fund’s Assets Under Management (AUM) increased from UGX 17.26 trillion in Financial Year 2021/22 to UGX 18.56 trillion in Financial Year 2023/24.
“This growth was driven by: member contributions, which increased from Shs1.49 trillion in Financial Year 2021/22 to Shs1.72 trillion in Financial Year 2022/23,” Ayota said.
The cost-to-income ratio improved from 11.7% in the Financial Year 2021/22 to 9.4% in the Financial Year 2022/23
“Our cost of administration reduced from 1.18% of total assets to 1.02%. We created more value for members using less money compared to last Financial Year,” Ayota said.
The rate of compliance slightly improved from 55% in Financial Year 2021/22 to 57% in Financial Year 2022/23
Ayota announced that with the current asset base, they project that the strategic goal of growing the Assets Under Management of UGX 20 Trillion by 2025 will be achieved by June 30, 2024, one year ahead of schedule.
Ayota also revealed that in 2015, NSSF set a strategic goal to pay more people in less time – on average in 24 hours and the in Financial Year 2022/23, the Fund’s turnaround time declined slightly from 12 days to 13 days
Benefits paid to qualifying members increased from Ugx 1.19 trillion in the Financial Year 2021/22 to Ugx 1.202 trillion in the Financial Year 2022/23. The number of qualifying members were over 46,000.
“Although we are behind this target, we are confident that once we achieve 100% stabilisation of the new Pension Administration System (PAS), and members’ uptake of self-service channels improves, we will move closer to achieving this objective,” he said.
In terms of customer satisfaction, the NSSF MD revealed that in 2015, they set a strategic goal to increase their customer satisfaction to 95% by 2025.
“In the Financial Year 2022/23, customer satisfaction remained flat at 86% compared to the previous Financial Year,” he said.
In the Financial Year 2022/23, staff satisfaction declined to 86% compared to 93% in the previous Financial Year.
“The performance on customer and staff satisfaction reflects the challenges the Fund went through in the 2nd half of the year. However, we are confident that given the continuity and stability going forward, these strategic objectives are within reach,” Ayota said.
On the NSSF investment front, Ayota said the decrease in the value of the stock markets in Kenya and Uganda, the strengthening of the Uganda Shilling against the regional currencies, and the decrease in long-term bond interest rates had all contributed to a depressed market.
“Our investment portfolio mix is predominantly skewed towards fixed income, which is in line with our overall modest risk profile. As of June 30, 2023, the following was our investment mix. Equities at 12.5%, Real Estate at 9.01% and Fixed Income at 78.48%,” he said.
However, due to a decline in the prices of stock markets, the Fund experienced a slight decline in interest rates.
“As the Fund primarily allocates its investments to long-term bonds, this decrease in interest rates had a direct effect on our investment portfolio. Diminished Stock Market Values: The devaluation of East African stock markets had a notable impact on the valuation of the Fund’s equity investments. Ugandan Shilling Appreciation Against Portfolio Currencies, Especially the Kenyan Shilling: This currency appreciation influenced the value of the Fund’s investments denominated in Kenyan Shillings,” he said.
Ayota said he is confident that the Fund will pay a competitive interest rate for the Financial Year 2022/23.
This Minister of Finance, Planning and Economic Development will declare a new rate at the forthcoming 11th Annual Members Meeting that will take place on September 26, 2023.
