Foreword by NSSF Chairman Board of Directors

Dr. Peter Kimbowa

CHAIRMAN, BOARD OF DIRECTORS

On behalf of my Board, I take this opportunity to commend our predecessors for their great leadership, upholding good governance and ensuring that the Board’s mandate was delivered during the past three years.

Dear member,

I am pleased to present our corporate governance report for the FY2021/22, which has been a year of smooth transition from the 11^th Board to the 12^th Board. On behalf of my Board, I take this opportunity to commend our predecessors for their great leadership, upholding good governance and ensuring that the Board’s mandate was delivered during the past three years.

It has been a remarkable year in which the National Social Security Fund (Amendment) Bill was assented to by His Excellence the President of Uganda and came into force on 7 January 2022. The amendment has enhanced the Fund’s governance structure by introducing dual supervision of the Fund and a tripartite Board.

I also thank the Appointing Authority that has made a substantial improvement to the Board with respect to gender diversity and this will be replicated at all levels.

The issue of sustainability and ESG is also high on our agenda and continues to be a focus area, particularly regarding our real estate projects and investee companies. The elements of ESG have over the years been integrated into the business and we are proud of the green certificates which were awarded for our Lubowa and Pension Towers real estate projects.

Our governance structure and processes have enabled us to create value for the Fund, our members and all our stakeholders. This year will also be remembered as the year when the Covid-19 restrictions were lifted, and the economy was fully opened.

Our governance report sets out our robust approach to sound corporate governance and alignment to King IV principles, our mandate as the Board, together with reports from each Board Committee and activities executed in this ever-changing environment.

The Board, being the overall custodian of good corporate governance, together with the Management Team, promotes and upholds the core fundamental principles of governance; accountability, fairness, transparency, and social responsibility in the way we conduct business and in all our processes.

Our integrated report discloses our performance to our members, our stakeholders, and the public as a commitment to our accountability and transparency. The Fund held an Annual Members’ Meeting in September 2021 which was both physical and virtual, where the financial performance and audit findings were presented to our members and all stakeholders.

The Board’s approach is to ensure that corporate governance is embedded into the strategic objectives, operations, and internal processes of the Fund’s business. The Board is committed to keeping abreast with new corporate governance trends from an international, regional, and local perspective in the fulfilment of its vision to become the social security provider of choice to its members and generate tangible sustainable returns.

Compliance Statement

The Fund’s governance approach is based on the main principles and provisions set out in the UK Corporate Governance Code and the King IV Code on Corporate Governance.

The Fund adheres to and ensures full compliance with the provisions of the National Social Security Act Cap 222 (as amended) and the Uganda Retirement Benefits Regulatory Authority (URBRA) that regulates the Fund’s activities.

The Board is also governed by an internal Board charter which stipulates the parameters within which the Board operates and ensures the application of the principles of good corporate governance in all its dealings. The charter sets out the roles and responsibilities of the Board, its committees, and individual Directors, including its composition and relevant procedures of the Board. The charter is aligned with the provisions of the UK Code and King IV Code on Corporate Governance.

The way we have applied and explained these governance principles is demonstrated throughout the report. The Board confirms that the Fund, throughout the period under review, complied with all applicable laws and regulations.

NOTABLE OUTCOMES 2021/2022

Regulatory
reforms

The Board has oversight of compliance regulation through the Audit and Risk Assurance Committee

The National Social Security Fund Amendment Act 2022 came into force on 7 January 2022.

The Amendment introduced midterm access to benefits by our members, expanded coverage of members and employers as well as the dual supervision of the Fund by both the Minister of Gender, Labour and Social Development and the Minister of Finance, Planning and Economic Development.

Progression of real estate projects

The Board is responsible for strategy setting and oversight of strategy execution

The Construction of Pension Towers, which has changed Kampala’s skyline, and will contribute to modern office space, has progressed to 82% and completion is expected by February 2023
Phase one of the Lubowa Housing Project has been completed and 306 units are up for sale
Construction of the Temangalo Housing Project has progressed to 18%
The Off-taker project – Kyanja which will accommodate 160 affordable housing units has progressed to 45%

Improved turn-around time for payment of benefits

We endeavour to improve our turn-around time for processing and payment of benefits.

We are delighted to report that the Fund was able to pay midterm to qualifying members within an average time of 12.3 days.

Technology transformation

The Board has oversight of technology and information governance through the Finance Committee

The Fund launched a new Pension Administration System (OctoPAS) which is robust and will improve our efficiency.

It will also support our product innovation and create a seamless experience for our members. With the adoption of our new OctoPAS, we are well positioned to achieve a turnaround time for payment of benefits within 24 hours by 2025.

Policies approved

The Board is responsible for review and approval of internal policies

The Board approved amendments to the following policies:
Finance Policy
Investments Policy Statement and Procedures Manual
Human Resources Policy Manual

Reward and recognition for our Integrated Report 2021

We were delighted to report that the Fund was again ranked first runner-up at the FiRe awards for its Corporate Governance Report.

This is a testament that these results reflect the focus and commitment that the Board and management dedicated to corporate governance in upholding the core fundamental principles.

CHALLENGES DURING FY2021/2022

1. The NSSF (Amendment) Act, 2022

Following the amendment of the NSSF Act, the Fund had to reshape its investment portfolio to be able to pay out midterm benefits to its members.
The law provides for dual supervision of the Fund by two Ministries: the Ministry of Finance, Planning and Economic Development and the Ministry of Gender, Labour, and Social Development, which called for alignment of the governance and reporting structures.

2. The macro environment

We experienced an increase in the rate of inflation across the country together with a weakening of our currency.
The return on equities was affected by disruptions caused by the effects of Covid-19 and the Russia–Ukraine war.

3. Protracted litigation

The Fund continues to defend the proprietorship of its investment in some of the real estate assets against persons whose incessant claims remain a threat to this investment asset class.

Dr. Peter Kimbowa

CHAIRMAN, BOARD OF DIRECTORS

Foreword by NSSF Chairman Board of Directors

Dear member,

Compliance Statement