In the year ending June 2023, the Makerere University Retirement Benefits Scheme (MURBS) saw an increase in its return on investment, reaching UGX 42.3 billion, marking a 29.7 percent growth from UGX 32.6 billion. MURBS, which serves 3,041 active members, primarily composed of current and former Makerere University staff, attributed this rise to higher yields on government debt, offsetting losses incurred from equities.
The total assets managed by the scheme also saw growth during this period, rising from UGX 299 billion to UGX 352 billion. This increase was fueled by higher contributions and positive returns on investments.
Dr. Elizabeth Patricia Nsubuga, the Chairperson of the Board of Trustees for MURBS, noted that during the year, the scheme adopted a strategy of investing in near cash assets such as unit trusts. This approach was aimed at maximizing opportunities for daily cash contributions, particularly from various projects, and effectively managing the scheme’s liquidity requirements. Additionally, MURBS chose to divest from equities as a measure to safeguard its assets from the high volatility witnessed in financial markets.
One of the challenges faced during this period was the impact of financial market instability on equity investments, which led to a loss of UGX 246.94 million in foreign exchange losses for MURBS by June 2023.
This phenomenon is not unique to MURBS, as several pension funds experienced losses in projected revenue from equities. This was particularly evident in Kenyan stocks, where investors redirected their funds to developed countries such as the US and the UK, in response to rising interest rates due to inflation control. The National Social Security Fund, Uganda’s largest pension fund, reported a loss of UGX 1 trillion due to foreign exchange losses.
The 2022 annual report from the Uganda Retirement Benefits Regulatory Authority highlighted the adverse impact of global economic disruptions on equity performance, subsequently affecting member returns. In light of this, MURBS sought approval from the regulator to increase the threshold for investments in government bonds from 80 percent to 86.7 percent.
While the scheme reported a UGX 355 million increase in administrative costs, it benefited from the sale of land and investment income, resulting in a UGX 10.3 billion increase in net assets, reaching UGX 53.96 billion.
MURBS anticipates further growth in its assets as it recovers an outstanding debt of UGX 8.12 billion from the government. Dr. Nsubuga mentioned that a significant portion of this debt, UGX 17 billion out of UGX 25.3 billion, had been successfully recovered, with UGX 5.5 billion received during the 2022/23 financial year.
