NSSF pays out shs450bn in benefits as contribution collections grow by 15%

National Social Security Fund(NSSF) has announced they paid out shs450 billion as benefits to their members in the financial year 2018/19 indicating an increase of 25% from the previous year.

Addressing journalists on Tuesday during the release of the fund’s performance for the 2018/19 financial year, NSSF Managing Director, Richard Byarugaba said the revenue which includes interest, dividend and rental income had also risen by 20% to shs1.3 trillion.

“The increase in benefits is attributed to both an increase in the average payout and members paid. There was also increased collection from voluntary contributors,”Byarugaba said.

Shs402bn loss

According to the NSSF Managing Director, despite the fund’s revenue increasing to shs1.3 trillion, the overall income reduced by over UGX 402.8 billion due to a decline in regional equity prices and currencies.

Byarugaba gave an example of the Nairobi Stock Exchange that lost by 14%, the Uganda local share index shade 10% while Tanzania plummeted by over 21%.

“Consequently, the share prices closed below the prices registered at end of the previous FY, which impacted the performance of our equity portfolio. Further there was general depreciation of the regional currencies against the Uganda Shilling. Both the Kenya and Tanzania currencies depreciated by 6.1% against the Uganda Shilling,” he said.

He added that the war between US and China and BREXIT also affected the fund’s overall income.

Byarugaba noted that because of the above issues, many foreigners sold their stakes and at a lower price to return to their countries where they expect the markets to be safer.

The NSSF boss however, assured members that the fund is stable and financially sound, and continues to grow both in value and membership.

He revealed that fund’s assets under management increased by 13.1% from shs 9.9 trillion to shs11.3 trillion at end of June 2019, mainly driven by increased contributions and interest income.

Contributions also increased by 15%, from shs1.0 trillion to shs1.2 trillion.

“Our members should be confident about the health of the fund in the short, medium and long term as the Fund remains financially stable and growing. We have the ability and means to withstand any shock in the economy, given our aggressive but prudent investment approach and our investment diversification strategy. Safety and Security of members’ funds will remain the guiding principle in our decision making,” he said.