NSSF benefits not enough to sustain members in retirement-survey

A survey done by Enterprise Uganda in collaboration with the National Social Security Fund has indicated that NSSF benefits are not enough to sustain members during their retirement.

Released on Thursday, the survey indicated that the average amount paid to beneficiaries was about shs24 million which is not enough to sustain them.

The average age of the beneficiaries was 50 years.

“However, 60% received less than shs10 million and 83%nof the values was shared among just 25% of the beneficiaries. This shows that NSSF benefits are not sufficient for retirement; members need to be educated on how to multiply the meagre benefits in order to survive on them for longer,” the report said.

The report also indicated that in terms of expenditure, most(40%) beneficiaries spent the money got from NSSF on education of their children or their own while 34% and 33% spent their benefits on buying land and improving houses respectively.

The survey also indicated that 28% of the beneficiaries spent their NSSF benefit in investments like businesses, agriculture, trade, services and manufacturing among others whereas 16% spent it on food.

“ Members who venture into business face the most uncertain prospects due to the high business failure rate especially for new micro enterprises. Some expressed regrets,” the report said.

“Education, buying land, building a house and investing in a business were the

leading benefit usage lines. This explains the critical role entrepreneurship, business and financial literacy skills play for the beneficiary given that many shall inevitably end up venturing into business when they receive their benefits.”

Recommendations

The survey opined that retirees need more than NSSF to survive in retirement.

“The need of life after retirement are not being met by just the NSSF benefits but through a combination of other strategies. 45% continue to work past the retirement age and 4% are even seeking employment well into retirement while just 18% could sit back and claim to be retired or unable to work,” the survey noted.

It also suggested that retirees should invest in the real economy and not in financial instruments.

“The small tickets size of the investments made imply that the modest

returns available on the financial markets do not attract members to invest there, this is coupled with a possible low level of familiarity and awareness of these options.”