Families of some depositors are causing delays in the timely payment of survivor’s benefits, according to the National Social Security Fund (NSSF). These benefits are meant for the families of deceased members of the fund.
There’s a growing issue where the families of still-living members are prematurely trying to get these benefits with the help of the depositors. Patrick Ayota, the Managing Director of NSSF, spoke to reporters about the fund’s performance for the 2022/23 financial year and expressed concern about this problem. He noted that this is affecting the time it takes to pay other benefits because extra steps are being taken to check the information.
Ayota revealed that, out of every ten survivor benefit claims they checked, four had living savers pretending to be deceased. This has made it difficult for the fund to meet its goal of paying within 12 hours. As a result, the time it takes to get the benefits has gone up to between 12 and 13 days, even though the fund initially wanted to complete payments within 12 hours.
On a positive note, the fund’s performance for the financial year ending on June 30, 2023, showed an increase in revenues. The revenues went up from 1.9 trillion shillings to 2.2 trillion shillings. This increase was because they earned more from interest income, which went from 1.79 trillion shillings to 2 trillion shillings, and from dividend income, which grew from 84 billion to 139 billion.
They also saw a slight increase in real estate income, from 13.4 billion to 14 billion, and 16 billion in other income. Ayota explained that this growth in revenue was because of the fund’s smart investment choices, which allowed it to stay profitable even in a tough investment climate in Uganda and the surrounding area.
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Ayota said, “The investment environment in Uganda and the region was tough during the last Financial Year. However, because of our wise investment choices, we could increase our revenue, even though the market was down.”
The report showed that long-term bond yields dropped compared to the previous financial year, with reductions in the 10-year, 15-year, and 20-year bond yields. Also, the stock markets in Uganda, Kenya, Tanzania, and Rwanda went down, affecting where NSSF had invested.
One big change was the Uganda Shilling getting stronger against other currencies, especially the Kenya Shilling, which lost 22.2% of its value against the Uganda Shilling.
Despite past management problems, the fund’s financial situation has stayed steady, and the Assets Under Management (AUM) are still growing. “Our Assets Under Management (AUM) went up from 17.26 trillion shillings in Financial Year 2021/22 to 18.56 trillion in Financial Year 2022/23. This growth came from more member contributions, higher realized income, and a cost management strategy that lets us give more value to members at a lower cost compared to the previous Financial Year. In fact, with our current assets, we expect to reach our goal of 20 trillion shillings in AUM by June 30, 2024, a year sooner than planned,” Ayota explained.
Ayota reassured NSSF members that the fund is in good financial shape and said they’re focused on long-term sustainability, as outlined in their “Vision 2035,” where they want to grow the fund to UGX 50 trillion and achieve a 95% customer satisfaction rate and staff engagement.
The benefits paid to qualifying members increased by 1% from 1.189 trillion in the Financial Year 2021/22 to 1.199 trillion shillings. The cost-to-income ratio improved from 11.7% in the Financial Year 2021/22 to 9.4% in the Financial Year 2022/23, and the rate of compliance slightly improved from 55% to 57%. Additionally, 180,000 new members joined the fund during the year.
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