The Minister of Finance, Planning and Economic Development Matia Kasaija has declared 11 percent as the new National Social Security Fund (NSSF) interest rate for the financial year 2018/2019 to members.
The minister made the announcement on Friday during NSSF’s seventh Annual Members Meeting in Kampala.
The interest is however lower than the 15 per cent that was given out in the last financial year.
“After due consultations from stakeholders, I announce that this year, the Fund shall reward 11 per cent to its members. Last year we rewarded 15 per cent because the environment which the Fund operated in had the money,” said Kasaija.
“The rate I have declared is higher than 6.7 per cent, the 10 year average inflation and this means than your money still has value.”
The Minister further explained that this year’s interest is lower due to a decline in regional equity prices and strengthening of the Uganda shilling, which affected the valuation of NSSF’s holdings in all foreign currency balances and equity valuations thus impacting the Fund’s over all income.
“The stock exchanges in East Africa, and generally in the whole of Africa suffered significant reduction in value of the listed entities, affecting entities like the Fund that invests regionally,” Kasaija said.
The new rate translates into Shs978 billion and will be calculated and credited on the balance outstanding on the members’ accounts as at July 1 2018, in accordance with provisions of the NSSF Act.
“Most important, the Fund has paid its members a real return, thus eliminating the risk of erosion of the value of their saving as a result of inflation. The savers’ money is being in real terms which is the fundamental matter for long term savers,” he added.
NSSF Managing Director Richard Byarugaba said that inspite of the difficult investment environment, the Fund performed over and above most performance targets.
“Overall, we created value for our members. In fiscal year 2012/2013, we committed to pay members a real return – at least 2 per cent above the 10 year inflation. We have consistently delivered on this promise and have done so again this year,” he said.
Byarugaba also disclosed that customer satisfaction rating has stagnated between 80 per cent and 86 per cent.
“We hope to address this through the proposed amendments to the NSSF Act. This act will help to improve coverage, adequacy and relevance to our members.”
NSSF Board Chairman, Patrick Byabakama reassured members that the Fund was on a growth trajectory, having grown its assets under management by 13.6 per cent from Shs9.9 trillion in the previous financial year to Shs11.3 trillion in 2018/2019.
He also said that the Fund’s focus going forward will be to conclude the Real Estate projects as well as innovations to be responsive to needs of the members that will be occasioned by the proposed NSSF Amendment Bill.
“The bill should reflect the pains and aspirations of the members.”
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