The National Social Security Fund (NSSF)
Tel: +256 417 331755 | Toll free: 0800 286 773
Email: customerservice@nssfug.org | Web: www.nssfug.org
 Richard Byarugaba Managing Director NSSF | Location: Plot 1 Pilkington Road, Workers House, 14th Floor, Kampala, Uganda Address: P.O Box 7140, Kampala, Uganda  NSSF stake in Umeme rises to 23% after Shs60bn deal The National Social Security Fund (NSSF) is now cementing its position as the single largest investor in Umeme, after purchasing an additional 121million shares in the utility company for Shs59.4bn. NSSF announced that it had reached an agreement with Actis to acquire 7.5 percent of the shares it held in Umeme.That means NSSF’s stake will increase from 15.5 percent to 23 percent.“Umeme Limited also enjoys attractive future prospects, making it a key holding in our equity investments portfolio. The investment also fits well with our strategy to diversify our investments portfolio, a key component of our Corporate Strategy to grow the Fund to Ushs 20 trillion,” Mr. Richard Byarugaba, the Managing Director NSSF said in a statement. Read more ▪ Why NSSF interest to members fell to 12.3% NSSF’s investment returns were almost a replica of the weak economies within East Africa. This translated into a 12.3 per cent interest for members on their account balances, down from 13 per cent. The lower returns on some investments saw the after-tax profit of the Fund decline to Shs491b from Shs641b.This was reflected in the plunging of the stock markets in the entire East Africa that led to a drop in the value of shares that NSSF held. The regional markets were specifically under pressure from investors who had been pulling back to investments in markets such as Uganda because of the decision made in Washington. Read more ▪ NSSF take over of Uganda Clays hits snag The National Social Security Fund (NSSF) conversion of debt-to-equity in Uganda Clays may take longer than expected after the Fund revealed it needs another investor to come on board.It has been about two years since NSSF made the decision to convert about a Shs20 billion debt owed by UCL to more shares in the clay products manufacturer. The conversion would have seen NSSF increase its stake in UCL from 32.5 per cent to about 65 per cent.“Unfortunately, if we were to convert our debt into equity because we have seen the valuations, NSSF’s holding in UCL would exceed 49 per cent. Unfortunately, 49 per cent is the threshold that we cannot exceed on a company. What we are doing is trying to look for a co-investor. We have had some targets of co-investors,” Mr Richard Byarugaba, the NSSF managing director, told reporters. Read more ▪ NSSF net profit drops by Shs156b The National Social Security Fund (NSSF) members are likely to get a lower-interest return on their savings after the Fund posted a drop in net profit for the financial year due to a myriad of factors.The weak economy, sluggish performance of East African stock markets, depreciation of the Uganda Shilling and election cycle influenced NSSF’s reduced income and profitability.During a press conference, the Fund declared after tax profit of Shs491b down from Shs647b mostly due to a drop in unrealised income because of the fall in the value of shares held in companies. It is from the after tax profit that members are paid and interest is determined. Unrealised income is a profitable position that has yet to be sold in return for cash, such as a stock position that has increased in capital gains but still remains open. Read more ▪ NSSF sashes interest rate to members The National Social Security Fund (NSSF) is looking to slash the earned interest to its savers accounts, to a yet to be announced rate.The unpleasant decision is in reaction to a myriad of setbacks, both national and regional that shocked the Funds’ performance through the Financial Year. NSSF’s Managing Director Mr. Richard Byarugaba made the announcement while speaking the press at the Workers House in Kampala.The MD named some of the reason to the impending cut on the savers interest, as the country’s poor economic growth, the volatility of the Uganda Shillings, the coming of regional stock markets and the uncertainty caused by the general elections. NSSF announced a remarkable increase in the interest rate payable to savers of 13%, up from 11.5%.This translated into Shs 514 billion which was credited on the members’ accounts compared to Shs 366 billion paid.“The return paid to members every year depends on the financial performance of the Fund,” explained the MD Byarugaba today.“The tough investment environment, modest growth of the economy, the effects of the stock market across East Africa, the effects of the depreciation of the shilling, have affected the Fund’s financial performance, and in effect, may affect the return the Fund will pay to members.” Read more ▪ NSSF managing director Byarugaba wants liberalization of Pension Sector fast-tracked NSSF Managing Director Richard Byarugaba has advocated for the enactment of the Retirement Benefits Sector Liberalization Bill 2011 by Parliament saying it will go a long way in making positive reforms within the pension sector.While Ugandans continue to decry the high interest rates, Byarugaba notes that the Bill will attract more players in the sector as well as release the pressure currently exerted on commercial banks.The NSSF MD was speaking Wednesday at the opening of the annual conference for the Institute for Certified Public Accountants in Uganda (CPA) at Imperial Botanical Hotel in Entebbe. The reason as to why the interest rates have sky rocketed in Uganda is because all the liquidity comes entirely from commercial banks. There’s no source of funding for short time financing (below 10 years) except Uganda Development Bank,” he said.“Liberalization will bring the cost of money down because we shall have new products that enable working Ugandans access their retirement savings at an early age.”He explained that NSSF is currently the only formal pension scheme in Uganda that relies on consistent contributions by members unlike the public service scheme which draws funds from the consolidated fund.“The problem with this is that its scheme will then compete with public services which have the same source of funding.” Read more ▪ NSSF launches saving culture campaign The National Social Security Fund (NSSF) has launched a campaign meant to instil a saving sculture to its members.This campaign, ‘Friends with Benefits’, will run as a TV show programme profiling retired workers who invested or used their NSSF benefits to transform their lives, and those of the communities around them.Mr Richard Byarugaba, the managing director NSSF , in a statement, said the campaign aims at showcasing inspiration success stories from members who have received and used their benefits to change their lives, their families and the communities they live in. “This is intended to motivate existing and potential members to invest in retirement savings,” he said. NSSF has paid a total of Shs1.1 trillion to 250,000 members who have claimed their benefits on retirement.“This is a significant amount we have put into the economy of Uganda and is in line with the Funds’ commitment to deliver a better life to our members,” Mr Byarugaba said. Read more ▪ NSSF targets informal sector workers The National Social Security Fund (NSSF) has finalised creating a product, which is yet to be named, targeting pension savings from workers engaged in the informal sector.While addressing the press, Mr Richard Byarugaba, the NSSF managing director, said within the coming, the Fund will have concluded working out the product.He said savers in the informal sector will now be able to save using mobile money like it is already happening in neighbouring countries.“The NSSF threshold for the contributors is currently 15 per cent where the employee contributes five per cent, while the employer contributes 10 per cent. The Jua Kali (workers in the informal sector) will have the flexibility that will allow them to go in and out,” he said.He added that for as long as someone earns a minimum salary of Shs150,000 regularly, such a person is eligible to contribute to the Fund. Read more ▪  NSSF to raise sh240m for KCCA schoolsKCCA Executive Director Jennifer Musisi (right) addresses a press conference flanked by NSSF Managing Director Richard Byarugaba (center) and Harsh Master Miria Rugomwa (left) and during the launch of the NSSF Kampala Hash 7 Hills Run an initiative aimed at raising sh240m to be channelled to Kampala Schools, at NSSF offices. Photo by Michael NsubugaOver 70,000 school going children in Kampala Capital City Authority schools are set to benefit from proceeds of the NSSF Kampala Hash Sevens Hills Run due in Kampala.Organised in partnership with Kampala Hash House Harriers; a group of professionals who are "a drinking club with a running problem'', the run is aimed at raising sh240m that will be channeled to selected Kampala schools towards improving their sanitation and renovation of structures."This initiative is part of our strategy to build synergies for the benefit of our members who subscribe with NSSF and also the community in which we do our business, so it is a CSR opportunity for us," NSSF Managing Director Richard Byarugaba. Read more ▪ NSSF: We have a duty to grow members savings National Social Security Fund (NSSF) declared a 13 per cent interest rate for members. The rate, which is the fourth consecutive double digit increase, reflects a remarkable transformation. NSSF total assets, income and costs have grown by an average of 27.2 per cent, 52.9 per cent and 6.3 per cent respectively with members’ paid up benefits increasing from Shs101.4b to Shs186.6b. But even with such achievements, the Fund’s investment strategy continues to be portrayed as easy, focussing on investments in treasury bonds and fixed deposits, ignoring investing in private equity and domestic infrastructure. NSSF is a retirement benefits scheme that was structured by law as a provident fund, which means members save and withdraw their savings as a lump-sum once they qualify. Read more ▪  NSSF, URSB agree to share key data National Social Security Fund (NSSF) has entered into a Memorandum of Understanding (MoU) with Uganda Registration Services Bureau (URSB) to enable information/data sharing on companies registered with URSB and bio-data for NSSF members.Speaking at the MoU signing in Kampala, NSSF managing director Richard Byarugaba said: “Under this arrangement, URSB will provide NSSF with information on companies and bio data for NSSF’s members. This information is vital in enabling the Fund improve compliance and benefits processing.He added: “Our partnership with URSB is therefore very timely because it enables us access vital information on companies necessary for our compliance audits. We therefore believe that with increased access to information, our compliance levels will improve to 82 per cent up from 77 per cent.”On the other hand, URSB registrar general Bemanya Twebaze said URSB will have a registration centre at NSSF, while the Fund will also have a service centre at URSB. Read more ▪ NSSF pays out Shs165 billion to beneficiaries The National Social Security Fund (NSSF) paid Shs165 billion to more than 11,000 beneficiaries, representing an increase of 18 per cent, according to information obtained from the Fund.The information also shows that , the Fund has paid in excess of Shs694 billion to more than 100,500 beneficiaries.Ms Barbra Teddy Arimi, the NSSF head of marketing and communications, said the figures are a testimony that the Fund provides social security services to Ugandan workers.“We have consistently paid all members of the Fund that lodge in their benefits claims when they qualify. The amount of money we pay out has consistently increased by 27 per cent on average,” she said.Time taken to pay reduces, She added that the Fund has also improved the time it takes to pay benefits. Read more ▪ Uganda NSSF targets 20,000 young people NSSF want to impart the necessary career and entrepreneurship skills that will help them when they leave school and start looking for employment opportunities.But they will also be encouraged to take up the culture of saving as a way of reducing poverty in Uganda.According to the NSSF Deputy Managing Director Geraldine Ssali Busuulwa, the idea for the expo in different universities came up after realizing many people felt saving with NSSF was a burden. She said most Ugandan graduates lacked the basic skills like confidence, integrity and being knowledgeable which renders them unfit for employment.Read more ▪ The Observer, Francis Xavier Ssempiira wrote an excellent rhetorical article, an idealist armchair solution to the Uganda Clays Limited dilemma, which disregards the role of the NSSF in this debt trap.Not only is it simplistic to Uganda Clays' shareholders such as Habib Sembatya, it is a desperate effort at covering up NSSF's role in regard to this whole debt equity conversion transaction. Once upon a time, at the height of the Clay manufacturer's dominance, a proposal was put to the board by the now deceased John Wafula, who was the chief executive officer of the company at the time.That proposal was to put up a plant in Kamonkoli in eastern Uganda. The proposal led to the entry of NSSF as a majority holder after the Kenyatta family-affiliated Kenya Clays Limited opted to sell its entire stake rather than see out that Kamonkoli factory proposal. Read more ▪ The National Social Security Fund will focus on buying stakes in profitable companies across the East African region without losing sight of the profitable investment in the country, the Funds managing director, Mr Richard Byarugaba, has said. Speaking at a news conference, Mr Byarugaba, who is serving his second and last term, said the Fund will put its money in areas that attract high returns on investment.He said: “We will focus on equity investment because the returns we have attracted from that portfolio speak for itself.”He continued: “We have attracted 44 per cent return from the equities, 14 per cent from the fixed incomes and 1 per cent on real estates. This explains where our focus will be.”He, however, disclosed that attempts to complete construction of Pension Towers, Lubowa Estates and Temangalo are underway. He also hopes that before his term comes to an end, at least the first phase of the Pension Towers will be complete.Importantly, he revealed that returns on members’ savings should be able to withstand inflationary pressures. Read more ▪ The National Social Security Fund (NSSF) has unveiled plans to buy bonds of high growth potential start-ups on the Growth Enterprise Market Segment (GEMS).The fund intends to buy well-designed bonds on the alternative market and later sell the same to new investors through the stock exchange; the move is expected to bolster the segment.Richard Byarugaba, the NSSF managing director, told the media at Workers House that discussions have been held with the Capital Markets Authority (CMA) and the Uganda Securities Exchange (USE) on the prospects of the bonds.He revealed that separate discussions have been held with senior offi cials of Bank of Uganda about increasing the variety of investment instruments such as infrastructure bonds, like is currently available in Kenya and Rwanda.Read more ▪  Certainty is the principal virtue of every legal system worth its name. The law must be certain and predictable.And the integrity of the law must be preserved. The consistence between the spirit and letter of the law is what makes the integrity of the law. Parliament is yet to pass the Retirement Benefits Sector Liberalization Bill. This bill intends to reform the pension system in Uganda's private and public sectors.For instance, if the bill is passed in its entirety, the National Social Security Fund (NSSF) would be no more. It will be replaced by private, licensed schemes. The Pensions Act, the law governing the retirement benefits of public servants, will be repealed too.If the bill becomes law, it will change the tradition whereby the burden of paying for the retirement benefits for civil servants borne by taxpayers will now become contributory. The sponsors of the bill claim that the non-contributory stance of civil servants is unsustainable because it has to be guaranteed by a state funded by taxpayers. Read more ▪ NSSF: Contradictions cloud pensions liberalization Major contradictions still exist among the major backers of the impending liberalized pensions sector on which model to adapt with the liberalization bill expected on the floor of parliament when the house resumes. Speaking during one of the last consultative meetings informing the bill, National Social Security Fund (NSSF) senior management proposed that Uganda should follow the Ghanaian model where it is mandatory for workers to contribute to a certain savings scheme. On the pros of this mandatory defined benefits scheme where legible workers would all contribute a certain percentage to NSSF before opting for a second scheme, Ivan Kyayonka says workers would have more security of their money. Under NSSF currently, it is the model of the defined mandatory contribution where the contributor gets a statement of their savings as and when they want. “The risk is with the member not the scheme, if the money is lost, he has no fallback position,” noted Richard Byarugaba, NSSF chief executive. Read more ▪ NSSF to boost contributions by tapping into government registers National Social Security Fund (NSSF) will use registers of government institutions that have records of licensed businesses in the country to identify companies that should be remitting workers contributions to the Fund but are not doing so.According to the managing director of NSSF, Mr Richard Byarugaba, arrangements are already underway to partner with Uganda Revenue Authority (URA), Kampala Capital City Authority (KCCA) and Uganda Registration Service Bureau (URSB) and use their registers to bring on board companies that are supposed to be paying workers monthly contribution.Speaking after the launch of E-Learning System, an initiative aimed at improving competences and skills among NSSF staff countrywide, thereby reducing its staff development budget by nearly 40 per cent, Mr Byarugaba said the partnership with the cited agencies will enhance compliance. Read more ▪  NSSF to the Rescue The Uganda Clays counter on the Uganda Securities Exchange (USE) had neither outstanding bids nor offers, but 50,000 shares were traded at Shs 20 each. This is hardly the activity one would expect from a company in which the National Social Security Fund (NSSF), East Africa's largest pension fund, took majority shares. The Fund took a decision to convert its debt in the troubled clay products maker into shares - thus raising its shareholding to 66%. The decision has sparked mixed reactions from shareholders and market analysts, but top NSSF bosses have defended it as a "prudent" deal.At the Fund's second annual members' meeting in Kampala, Geraldine Ssali, the acting managing director, told The Independent that converting the Shs 18 billion debt - which the company was unable to pay it back - into shares would give NSSF a controlling interest. "Our intention is to resuscitate the business so it becomes profitable because the business is the underlying asset for the share floating. So once the business turns around and the share price starts to go up, you can now start to exit by selling your shares in a profitable manner," she said. Read more ▪ NSSF muses new investment avenues Uganda National Social Security Fund (NSSF) are planning to roll out new products like housing, insurance, medical and education targeting low income earners to boost their limited investment portfolio.The Fund expressed desire to tap into the informal sector so that their member's base expands to meet their projected asset base growth of over Ushs6 trillion (about $2.3bn), the best in E. Africa.The Fund's current asset base stands at Ushs4.4 trillion ($1.7 billion), bettering NSSF Kenya which is at $1.6billion and NSSF Tanzania at $1.3billion.This, according to the Fund's Board Chairperson Ivan Kyayonka will enable management to venture into new targeted markets and investment opportunities.The Fund also wants government together with private investors to put in place infrastructure bonds and other financial instruments for long term investment ambitions. Read more ▪ Uganda's National Social Security Fund [NSSF] is now the biggest fund in East Africa, according to the fund, which could make it one of the most sought-after institutions for finance.According to a statement from NSSF, which was released during the members' meeting, the fund's current asset base of Shs 4.4 trillion ($1.7 billion), outstripped NSSF Kenya ($1.6bn) and NSSF Tanzania $1.3bn."NSSF Uganda has become the benchmark for the industry both within and outside the East African region. Our performance has laid the foundation for our future," NSSF Chairman Ivan Kyayonka said at the meeting.Geraldine Ssali, the acting managing director of NSSF, said the asset base widened as a result of the improvement in compliance. She said the fund's asset has grown by more than 150 per cent. She said annual total contribution more than doubled to Shs 638bn from Shs 295bn. She said companies had become compliant in remitting their workers' contributions. Read more ▪ Shs170b set aside to boost savers’ interest - NSSF board About Shs170 billion has been put aside to absorb shocks that could eat into members’ savings, the acting managing director of National Social Security Fund (NSSF), Ms Geraldine Busuulwa Ssali, has disclosed.This means no matter how the economy performs or no matter the loopholes the Fund encounters along the way, members’ savings will always attract interest that is above inflation.Speaking at the NSSF annual members meeting, Ms Ssali said: “We will maintain returns even when the economy does not perform very well.”She continued: “We have a surplus of Shs170 billion and when need be, we can have some of it added on the interest of the members if the economy doesn’t do well. We have a solid financial base.” Ms Ssali further said compliance levels improved from 52 per cent, to 73 per cent and they currently stand at 77 per cent. Contributions grew year on year at an average of 23 per cent, annual total contribution more than doubled from Shs295 billionn, to Shs553 billion, to Shs638 billion. “The Fund’s assets are more than adequate to cover member liabilities. Read more ▪ NSSF collects sh55b per month National Social Security Fund (NSSF) collects an average of sh55b per month, the acting managing director, Geraldine Ssali, has revealed. Ssali told a second annual members' meeting in Kampala that the Fund’s balance sheet has grown from sh3.4 trillion to sh4.4 trillion.“The Fund now operates under a relationship management model which has led to an increase in collections from sh28b to sh55b per month.Ssali said the revenue has increased to 26% mainly from bonds, equities and Fund assets.“People think we keep money at NSSF workers house, No! We have got accounts,” she said.No losses recorded for the year adding that investing in UmemeLtd shares was best performing portfolio on NSSF portfolio delivering about 41%. Read more ▪ NSSF to save Uganda Clays from collapse It is now or never for Uganda Clays Limited (UCL). The National Social Security Fund (NSSF) has announced that it will convert a sh16.7b loan to UCL into equity in a bid to secure the company’s future.Speaking at the UCL annual general meeting at the Kampala Sheraton Hotel, Geraldine Ssali, the acting NSSF managing director, noted that the move will increase NSSF’s stake in the company from 32.5% to 66% and double its board representation to six on the 10-member board. UCL registered a loss of sh3.29b largely due to high production costs, debt servicing, and aggressive competition. External auditors Ernst and Young pointed to a ‘material uncertainty’ in the company’s prospects. NSSF’s move is likely to send the company’s share price below the current sh20 per share, making it harder for shareholders that have gone four years without a dividend to cut their losses by selling on the stock exchange.“We know that things have been on a decline in the last couple of years, but as major shareholders, we believe in the long term sustainability of the company. We may have to reengineer the way the business operates,” Ssali said.“We will hire a transaction advisor to see how this will affect us since this is workers money. If we pull out, the company will close. You have already heard about the debt,” she added. ▪ NSSF: Strenous Gov’t Procedures Hurting Investment Plans The National Social Security Fund (NSSF) has appealed to government to allow them a freer working environment, to be able to put the Shs4.3 trillion fund to more sustainable and lucrative investments.Officials at NSSF said the body still lacked sufficient latitude to exercise its mandate of growing the savers monies which have exceeded Shs 60 bn per month.They insist that looking for safe and long term investment for such huge sums of money amidst aggressive competition from other Funds across the region requires fewer huddles from government. NSSF Managing Director Ms Geraldine Ssali told press at Workers’ House that the body was facing too much restraint in its investment plans because of lengthy clearance procedures from government.“What we want are as minimal levels of approval as possible, to allow us certain metrics in which we can operate like any other competitive business,” she said. Read more ▪  The National Social Security Fund (NSSF) has received a dividend payment of more than Shs 3.3 bn against its shares in Umeme Limited. NSSF is the third largest institutional investor in the utility distribution company, after purchasing an additional 100 million shares in the company in May this year, which increased its stake to 231,722,771 shares, an equivalent of 14.27 percent. The development comes amidst a Parliamentary hearing with MPs expressing concerns that the Umeme investment was “irregular.” Acting Managing Director, Geraldine Ssali said the decision to invest in Umeme Limited was not ill advised since “the Fund carried out due diligence, secured all necessary approvals, and followed relevant procedures.” She further pointed out that the “dividend earnings are a result of the Fund’s overall aggressive but prudent investment strategy that has led to revenue growth of more 200 percent and payment of a return above inflation to members, over the last 3 years.” Read more ▪ Despite social security being the best retirement savings vehicle world over, majority of Ugandans do not have social protection plan to provide a revenue stream during old age. Uganda’s working population is estimated to be 14 million. But only about five per cent are covered by the National Social Security Fund (NSSF), the public service pension scheme and a few voluntary schemes.A few Ugandan savers are estimated to put away less than two per cent of their annual income for a rainy day in future. This is not because Ugandans do not have enough money to save for their retirement, but due to lack of trusted saving vehicles that would ensure safety of their savings. NSSF, the only statutory provident fund that collects the 15 per cent compulsory monthly contributions from firms that employ five and more people, has in the past suffered from erosion of public trust and confidence due to several incidents of mismanagement of contributors’ savings. Read more ▪  IGG advises NSSF managers on funds The Inspector General of Government (IGG) has advised National Social Security Fund (NSSF) managers to take caution on every investment the Fund indulges in. This follows The IGG report on NSSF’s decision to invest in Umeme shares.“The decision by NSSF management and the board to invest in the Umeme IPO was in the interest of NSSF. The decision by NSSF Managers and the board to invest in Umeme was made in consultation with stakeholders. Notwithstanding that the investment was made contrary to Article 119; it generated revenue for the Fund to the tune of Shs1.9 billion in dividends,” Irene Mulyagonja the IGG said.Umeme market share value on the Uganda Securities Exchange also appreciated from the initial price, giving NSSF potential for capital gains in case of sales of shares.According to the report, NSSF’s management has been vigilant when investing in member funds.Read more ▪  NSSF raises rate to 11.23% The National Social Security Fund (NSSF) has increased its interest rate from 10 to 11.23 per cent for the financial year in an effort to offer a better return to its members as inflation continues to hurt household incomes.NSSF Managing Director Richard Byarugaba said the new rate is above the average inflation of 9.23 per cent. “Our focus is to provide a reasonable return to members, without compromising the safety of their savings; therefore, in the long term, the fund must preserve member funds,” he said. ▪   Red tape frustrating NSSF investment plans The National Social Security Fund (NSSF) investment plans in real estate have stalled due to unwieldy bureaucracy, the fund’s managing director, Richard Byarugaba, has said. Because of this, NSSF top management has decided to invest in Kenyan bonds because they do not require seeking affirmation from a multiplicity of stakeholders, which often takes a long time. For NSSF to invest in the real estate market in Uganda, management has to get a nod from the Solicitor General, Minister of Finance, Chief Government Valuer and the Public Procurement and Disposal of Public Assets Authority. Read more ▪ |   |