About 50 percent of the NSSF beneficiaries exhaust their pension benefits within one year, according to the Fund’s Managing Director, Richard Byarugaba who says beneficiaries need to make wise investment decisions so as not to suffer during retirement.
Byarugaba said this Monday while opening the maiden Money Talk forum organized by NSSF at Kampala Serena Hotel.
He said the forum was conceptualized following the numerous requests made by those saving with NSSF asking that the Fund reviews the age at which they receive their benefits, to below 55.
“We have had many pleas from people who want to get the NSSF benefits before they are due. We needed something to help change your attitude and to adopt a healthy money saving culture,” he said.
Last year, NSSF paid out 24,000 beneficiaries to a tune of Shs 400bn.
Quoting findings from a recent survey, Byarugaba said 60 percent of the beneficiaries use their NSSF benefits to acquire a house.
“Mark you, that house they are acquiring by the time they retire doesn’t constitute an asset. It is a liability. What’s going to happen is – although it’s going to save you rent, it will not earn you money that will help you during retirement,” said Byarugaba.
The same study also revealed that 90 percent of the beneficiaries had only one long-term source of retirement savings – NSSF.
He challenged Ugandans to consider alternative assets that can sustain them without having to rely entirely on their pension.
Others use their expand their business, acquiring land, education medical expenses and agriculture.
“You should be able to enjoy your retirement. It is not too late to change, and the answer is what we are starting today – Money Talks”.
At the forum, Pius Michuri, the Managing Director of Kenyan firm, Nabo Capital, stressed the need for what he termed as goal-based investment. According to Michuri, the difference between the richest 1 percent who own 45 percent of the world’s wealth and the rest of the low income earners is that the former focus on passive income.
“Passive income means the money that checks onto your account even you are sleeping and not at work,” he said.
He also spoke to the importance of a security and lifestyle portfolio, saying studies have indicated that medical and education bills are the leading causes of bankruptcy in families in Africa.
Richard Byarugaba said the Money Talk forums will focus on availing resourceful information on investment, to Ugandans saving with NSSF. This will help them change their saving culture,” he said.
The Fund will as well use the forum to link its clients to professional advice on wealth management and how to set goals.
“Insurance is one tool we believe people have ignored. The numbers talk about only 2 percent penetration. We would like people to look at insurance as a tool they can use to enhance things like education and health,” the NSSF Managing Director added.