Outlook

We have presented our integrated report to provide all our stakeholders with balanced and transparent information, which can assist them in making more informed assessments of the organisation’s prospects (including its viability/ sustainability) and value creation ability in the future.

 

The information in this Outlook is essential when reporting to stakeholders as it completes the value creation story of the Fund as told in our report, which will also continue to evolve over the years.

Outlook

We have presented our integrated report to provide all our stakeholders with balanced and transparent information, which can assist them in making more informed assessments of the organisation’s prospects (including its viability/ sustainability) and value creation ability in the future.

 

The information in this Outlook is essential when reporting to stakeholders as it completes the value creation story of the Fund as told in our report, which will also continue to evolve over the years.

The information below covers the organisation’s strategic path ahead – the leadership’s view of the material uncertainties, disruptive factors, challenges that may affect the achievement of the strategic objectives and the potential implications for the organisation and of course the opportunities that have been identified. We present the information under each of the six capitals.

Legend: Outlook for the year ahead

INCREASING

REDUCING

STABLE

Financial Capital

Strategic Priorities

  • Increase contributions
  • Increase income earned
  • Improve cost efficiency

Challenges, uncertainties, and disruptive factors

Key challenge

 

The economy is still recovering post the impact of the Covid-19 pandemic. This affected the Fund’s business as the most affected sectors (Education and Tourism) are major contributors to the Fund’s contributions performance.

 

The period was also characterised by high benefit pay-outs compared to the budget, due to midterm payments. The Fund is still channelling funds to pay midterm benefit claimants. 

Mitigating factors/
opportunities

Measures undertaken to address the challenge

Diversification of the overall portfolio – fixed income, real estate, and equities.

Trend during the reporting period

Although the portfolio created a positive return on investments, the Fund’s equity assets struggled. The Equities recorded a fair value loss of UGX 123.59Bn for the year ended 30 June 2022. This is attributed to a decline in the value of most of our equities, especially those held on the Nairobi Stock Exchange (NSE).

Our annual collections target fell short by UGX 13.56Bn. However, the Fund’s YTD collections’ shortfall has been reducing over time and we expect a better performance next year.

Overall, the Fund has achieved an impressive performance despite the prevailing tough economic environment.

KPI

Minimum return of 10-year inflation +2%

Outlook

Over the coming 12-36 months the Fund’s asset allocation will be structured to ensure stability in the returns generated for members. Our goal is to ensure that we deliver an interest on member savings that beats long-term inflation by at least 2%.

Committee oversight

Investments and Project Monitoring Committee (IPMC)  

Manufactured Capital

Strategic Priorities

  • Improve data quality
  • Improve governance, compliance, and risk management
  • Hyper-automation of all core business processes

Challenges, uncertainties, and disruptive factors

Key challenge

 

Delays in payment of member benefits.

Mitigating factors/
opportunities

Measures undertaken to address the challenge

The Fund onboarded OctoPAS, a next-generation core Pension Administrative System (PAS) engineered to improve efficiencies, enable product innovation, and create a seamless experience for our customers.

Trend during the reporting period

During the year, the NSSF Amendment Act 2022 was passed into law enabling the Fund to expand its mandate to cover all workers and provide the members with a wider scope of benefits (including the midterm benefit).

Ahead of the amendment of the Act 2022, the Fund undertook structural changes to prepare to implement the new legislation. Among these was OctoPAS. The system went live in December 2021.

It was expected that in the short term, benefits processing time would average at 7 – 9 working days and drop to 1 day after the OctoPAS go-live date.

However, new benefits coupled with the system going through a stabilisation period meant that our benefits paying TAT was adversely affected – 12.3 days.

However, we are confident that our goal of paying member’s benefits within 1 day by FY2024-25 will be achieved.

KPI

Our strategic target is to pay member benefits in 1 day. Over the coming 12 months we aim to achieve a TAT of 7 days or less.

Outlook

With the Fund now having the capability to develop and pay new types of benefits as specified in ILO Convention 102, we believe that once we fully deploy the OctoPAS system, we shall be able to resolve some of the process challenges around claiming and payment of benefits.

In addition, the Fund will be embedding the new structure which supports efficient processing of benefits at a minimum cost to the member.

Committee oversight

Finance Committee

Human Capital

Strategic Priorities

  • Fully operationalise the new organisation structure
  • Enhance talent management
  • Diversity, equity, and inclusion

Challenges, uncertainties, and disruptive factors

Key challenge

Maintaining an agile, portable, and engaged workforce given the new operating environment.

 

Operationalising the new Fund structure without adversely affecting our business.

Mitigating factors/
opportunities

Measures undertaken to address the challenge

The Fund will continue to recruit the best staff available with the requisite knowledge and skills. The HR strategy emphasises growth and retention. Initiatives to enable remote work are operational and have enabled the Fund to maintain its performance level and accelerate digital transformation. Trend during the reporting period

Staff have been and will continue to be the fulcrum to ensure a strong and sustainable Fund. During the year, the Fund achieved a staff engagement score of 92%. The Fund continues to employ a hybrid work structure (where staff are allowed to work remotely or from the office).

During the financial year, the Fund carried out an organisational redesign aimed at improving our processes and removing duplications to serve our members better. We believe that this redesign will prepare us for the new operating environment.

KPI

Staff satisfaction rating of 95%

Outlook

With the operationalisation of the new Fund structure, staff will be required to learn how to create value within the new business model. During the year, the Fund will therefore implement a staff re-skilling programme to equip all staff with the requisite skills required to support the new structure.

Over the course of the coming year, the Fund hopes to establish a mentorship programme led by senior female leaders to drive the agenda of diversity, equity, and inclusion.

Committee oversight

Staff Administration and Corporate Affairs Committee (SACA)

Intellectual Capital

Strategic Priorities

  • Enhance brand image​
  • Support business growth​
  • Enhance product development

Challenges, uncertainties, and disruptive factors

Key challenge

 

A drop in communication due to a low rating on Interactive Voice Response (IVR) effectiveness and efficiency (due to a low rating on SMS alerts which were working intermittently) led to a slight reduction in our customer satisfaction score.

Mitigating factors/
opportunities

Measures undertaken to address the challenge

The brand has engaged a robust communication strategy that is involving policymakers and influencers; continuously communicating positively to influence the thinking of its members and how they feel about the brand.

Trend during the reporting period

Overall, the customer satisfaction score dropped slightly from 86% to 82%. However, the Brand’s image improved compared to the previous year. The impact of this has been seen in the equity index of 74% (vs 71% last year).

KPI

Customer satisfaction rating of 95%

Outlook

With the Fund now having the ability to offer new and relevant products to the members, we expect that in the short to medium term the brand will strengthen its position in the market even further.

In addition to this, the Fund plans to fully deploy a digital claims process. This was piloted through the online claims platform that was used to pay midterm benefit claims.

Lastly, and after complete verification of member details, the Fund will soon be able to offer personalised messaging and a unique customer experience.

Committee oversight

Finance Committee

Social and Relationship Capital

Strategic Priorities

  • Enhance strategic partnering
  • Improve customer engagement and satisfaction

Challenges, uncertainties, and disruptive factors

Key challenge

 

Member needs are constantly evolving; however, the Fund is not flexible enough to provide adequate social risk management solutions in the form of customised benefits.

Mitigating factors/
opportunities

Measures undertaken to address the challenge

The NSSF Act was amended and passed into law. The Fund can now cover all workers. The law also gives the Fund the mandate to provide more benefits and cover a wider range of risks faced by members. In addition, the Fund is partnering with other institutions such as NIRA, URSB, URA and Internal Affairs to ensure that member recruitment and benefit payments are as seamless as possible. This coupled with the PAS capability, will enable the Fund to achieve its objectives.

Trend during the reporting period

During the year, our PAS went live and the NSSF Act was passed into law. The Fund was able to quickly adapt and provide a new type of benefit to its qualifying members (Midterm Access).

In the short to medium term the Fund will be able to provide a wider range of benefits and cover more risks faced by members as is provided for under ILO convention 02.

KPI

Customer satisfaction rating of 95%

Outlook

Members have consistently requested the Fund to provide a wider and deeper range of benefits. The biggest stumbling block to this was that there was no legal instrument to support such innovation.

However, the NSSF Amendment Act 2022 has enabled the Fund to innovate and provide additional relevant benefits to the members. We believe that with improved staff capabilities and efficient processes the Fund will meet customer expectations in the short, medium and long term.

Committee oversight

Finance Committee

Natural Capital

Strategic Priorities

  • Reduction in paper consumption
  • Improve energy and water management
  • Improve waste management
  • Green certification for real estate projects and buildings owned by the Fund

Challenges, uncertainties, and disruptive factors

Key challenge

Slow staff adoption of sustainable energy, water, and waste management.

Mitigating factors/
opportunities

Measures undertaken to address the challenge

Adopting a sustainable approach to waste management, and minimising our use of resources across our business, guided by our energy management policy.

Total savings achieved for the year ending 30 June 2022:
  • 62% saving on stationery costs from using the Advanced Digital Archival (ADA) paperless system
  • 168% savings on energy consumption at Workers’ House during the past year
  • 12% saving on water consumption for Workers House and a 49% saving on social security properties

KPI

Annual saving of 15% on water and energy bills

 

Reduce paper usage by 95%

Outlook

Over the coming year, the Fund plans to continue moving to a completely paperless operation for correspondence and internal document generation and tracking.

 

We intend to formally adopt the integration of environmental sustainability into our supply chain management to enable the reporting of sustainable procurement practices.



However, the NSSF Amendment Act 2022 has enabled the Fund to innovate and provide additional relevant benefits to the members. We believe that with improved staff capabilities and efficient processes the Fund will meet customer expectations in the short, medium and long term.

Committee oversight

Staff Administration and Corporate Affairs Committee (SACA)

Given our outlook, the robustness of our risk management, governance, engagement and partnering with our stakeholders, refinement of our processes to achieve exceptional turnaround times, implementation of the PAS and our approach to sustainable business practices, the Fund is well poised to deliver the intended value across the capitals in the short, medium and longer term.

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