NSSF expands its catchment area from mandatory worker contributions to voluntary savers in both the informal and business sectors.
With the new scheme that was launched on 20th November, both existing and new savers can save for both the short and long term and hold multiple accounts.
According to Patrick Ayota, the Managing Director of NSSF, this move will help the fund achieve its target of covering 50% of the working population and reaching 50 trillion shillings in assets by 2040.
“In 2021, we conducted the NSSF Members Needs Research as we prepared to develop new products. 60% of our members told us that they were not saving enough and wanted more voluntary options. The research also affirmed that members need more products that address their Retirement Fund needs like education, health, and capital accumulation to start a business or seed acquisition,” he said.
“The NSSF Smartlife voluntary savings plan addresses these member needs and is flexible enough to enable a saver to choose mid to long-term savings goals but also offers an opportunity for optional affordable offerings,” Ayota added.
Ayota emphasized that anyone can make voluntary contributions, and mandatory members can also make voluntary contributions as top-ups.
“In developing this savings product, we considered flexibility, affordability, and choice for the saver. For instance, the minimum amount per voluntary contribution is UGX 5,000 and the member selects the frequency of contributions for a particular purpose over the preferred period. The return is computed on a daily balance but credited every month. Although the minimum lock-in period is 1 year, early exit is permitted with minimal withdrawal costs,” Ayota said.
Ayota further explained that introducing Smartlife Flexi is part of the Fund’s strategy to increase social security coverage to at least 50% of Uganda’s working population by 2035, with a special focus on targeting underserved workers.
“The Fund currently serves only about 2.3 million Ugandans, most of whom are in the formal sector. Up to now, the informal sector workers have been left out of the social security and protection net yet contribute significantly to the country’s GDP. This segment is very critical if the Fund is to realise its Vision 2035, which focuses on expanding our reach to 50% of the working population, gr