NSSF Uganda has introduced an innovative savings solution called “Smartlife Flexi,” a voluntary goal-based saving plan designed to empower individuals to save for specific periods and personal goals. This new product allows members to determine not only how much they wish to save but also when and for how long, providing unmatched flexibility in managing their financial futures.
During the COVID-19 pandemic, a staggering 90% of Ugandans lacked savings, highlighting a critical gap in financial preparedness.
Patrick Ayota, the Managing Director of the National Social Security Fund (NSSF), emphasized this point, stating, “We did research and came to realize that almost 98% of the members of the Fund who come for their money have no alternative savings.” This stark reality signifies the urgent need for more robust savings solutions in Uganda.
Ayota noted that 97% of benefits paid by NSSF go to living members, which indicates that many individuals are surviving well into retirement.
“This takeout tells you that the majority of us stay alive after retirement hence the need to plan for retirement,” he remarked. With only 3% of benefits going to survivors, it is clear that proactive financial planning is essential.
The launch of Smartlife Flexi aligns with recent legislative changes aimed at expanding social security coverage. Following the assent of the National Social Security Fund (Amendment) Act 2022 on January 2, 2022, significant reforms were introduced.
These reforms reduced the threshold for mandatory contributions from five employees to just one and allowed for voluntary contributions, thereby broadening access to social security for all Ugandans.
Ayota highlighted the current landscape: “There are now 1,219,512 Ugandans in the formal sector, 8,776,488 in the informal/self-employed sector, and 781,440 in the diaspora.”
This demographic shift indicates a vast number of unserved and underserved individuals who now have the opportunity to save with NSSF.
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Ambitious goals
NSSF has set ambitious targets. By 2035, they aim to have 50% of working Ugandans saving with the Fund, up from approximately 14% today. Additionally, they plan to grow their assets under management to UGX 50 trillion while maintaining a satisfaction rate of 95% among their members.
Ayota stated, “We want to innovate for new growth, keeping in mind the national agenda around infrastructure development & industrialization.”
Features of NSSF Smartlife Flexi
The Smartlife Flexi product is designed with user autonomy at its core. Members can make voluntary contributions starting from a minimum of UGX 5,000 and can choose how often they wish to contribute—be it daily, weekly, monthly, or at any frequency that suits them.
Ayota explained that this flexibility allows members to open multiple sub-accounts for different goals or even for minors. “The product is focused on either passage of time or purpose,” he elaborated.
Members can specify their savings goals and manage multiple accounts simultaneously. The returns on these contributions are competitive and calculated daily but credited monthly, starting three days after each deposit.
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