Makerere Pension Scheme will pay interest at 13.4%

The Makerere University Retirement Scheme (MURBS), a mandatory employer scheme for Makerere University employees, has paid interest of 13.4 percent to its members for the 2023/2024 financial year.

As at June 30, the Fund’s value stood at Sh409.2 billion, reflecting an annual growth of 16.2 percent (Sh56,838,969,000) over the previous year (Sh352.4 billion) and a 95 percent increase over the five-year period .

The 13.4 percent stake, totaling Sh44.9 billion, was announced by the scheme’s board of trustees chairperson Dr Elizabeth Nansubuga during the 14th Annual General Meeting (AGM) at Makerere University on Thursday.

Interest was credited to the accounts of 8,950 participants in the scheme.

“For the financial year under review, taking into account the net assets available for payment to members of Sh409.4 billion and the adjustments made, the Board of Trustees allocated Sh44,873,804,000 to the opening balances of members for the 2023/2024 financial year. As a result, the trustees gave members an interest rate of 13.40 percent, the highest rate in the last five years,” Dr. Nansubuga said.

Contributions remain a critical pillar of the financial health of the scheme. According to Dr Nansubuga, the sponsor, Makerere University, has remitted all fees for the 2023/2024 financial year, with the total fees collected/received amounting to Sh34.4 billion.

Of this amount, Sh28.7 billion was for Makerere University main payroll staff, Sh5.37 billion for contract and project staff, and Sh199.3 million for AVC subscribers and the MURBS secretariat.

“It is noteworthy that the sponsor’s contributions were released in a timely manner, ensuring compliance with regulatory requirements. This level of compliance reflects the sponsor’s ongoing commitment to ensuring a dignified retirement for its employees,” she said, adding that the Board remains committed to ensuring consistent and timely remittance of contributions; managed prudently and invested in accordance with the Scheme’s Investment Policy Statement.

Dr Nansubuga also attributed the scheme’s good performance to “the favorable outcome of a key court case which had significant implications for the scheme.”

She added: “As you all know, we have invested in a property where the Scheme has challenged the Uganda Revenue Authority’s tax assessment of Sh600 million in income tax. We went to court and won the case. This tribunal decision, which was made with costs, not only preserved members’ funds, but also set a precedent, confirmed the legal acumen and credibility of the scheme, and strengthened the integrity of our operations.”

The total benefits paid during the 2023/2024 financial year was Sh25.06 billion paid to 777 members, more than double the number of members (342 members) paid in the previous year.

More than half (51 percent) of benefits paid (Sh12.7 billion) were regular pension benefits for 161 members.

Notably, this financial year being the “interim results year”, the Trustees also paid out Sh11.2 billion to 594 members; of these, 64 percent were men, and the average payment period was 10 days.

In addition, the scheme also paid out Sh2.9 billion as final payout to 658 domestic beneficiaries.

According to the Chairman of the CPA Audit Committee, Mr David Ssenoga, the scheme has significantly reduced the debt burden of Sh8.85 billion through full recovery of Internally Retired Retirement Benefits (IHRBS) and arrears of sponsor contributions.

“The internal debt was a long outstanding debt (including interest) totaling Sh25.1 billion owed to Makerere University due to indebtedness to IHRBS. During the 2023/2024 financial year, the scheme returned Sh8.1 billion, offsetting the total domestic debt,” he said, adding that 86 percent of the scheme funds were invested in government securities, 4.4 percent in real estate, 9.4 percent – in real estate. in mutual funds and 0.2 percent in stocks.

“Government securities offer more stable returns,” he added.