The Annual Report was released on 14th August, 2019 at URBRA offices. The following were the highlights of the report;
Contributions and Benefit payments
During the period under review, total sector contributions increased by 13% to UGX 1.28 trillion from UGX 1.13 trillion in 2017. This increase in contributions was attributed to payment of outstanding contributions, new employer and employee registrations and annual employee salary increments.
In 2018, sector benefits payments increased by 28% to UGX 462 billion compared to UGX 360 billion in 2017. 90% of the benefits paid were lumpsum payments on account of attainment of the retirement age, joining of pensionable employment, permanent emigration and invalidity benefits due to permanent incapacitation. The remaining 10% of the payments were made on account of pension and death.
Overall net member contributions registered a 6.9% improvement to UGX 819 billion compared to UGX 766 billion in 2017.
Income and Operating Expenditure
In 2018, total sector income increased by 64% to UGX 1.8 trillion compared to UGX 1.1 trillion in 2017. The real rate of return on the sector’s investment portfolio was 15.8% (headline inflation rate at 2.6%) compared to the 8.2% (headline inflation rate at 5.6%) in 2017, enabling an average member return of 10.34%. The average interest declared by mandatory schemes was 12.5%, supplementary voluntary segregated schemes 9.88% and supplementary voluntary umbrella schemes 8.64% respectively.
Interest was the major source of income (62.1% of the total income) to the sector. Fair value gains accounted for 30.3% of the income with the remaining 7.1% of the total income being from dividends, rented properties, associates, and other income. However, considering that retirement benefits sector investments are made with a long-term focus. Unrealized gains or losses arising from short-term fluctuations in prices do not affect the profits of the sector on a net basis. Table 1 provides details on income of the sector.
Table 1: Income of the Sector
|Amount (UGX Billion)||1,087||1,813|
|Fair Value Gains/(Losses)||4.6||30.3|
Total operation expenditure of the sector registered an 18% increment to UGX 135 billion in 2018 compared to UGX 114 billion in 2017. Staff expenses accounted for 47%, service providers for 8%, consultancies for 7%, non-cash expenses for 6%, statutory levies for 4%, and other operational costs including AGMs, trustee indemnity cover accounted for the 28%. The sector cost to income and cost to asset ratios remained at 13% and 1.2% respectively.
As at end of 2018, the total sector investment portfolio was UGX 11.8 trillion, recording a 19% increment compared to UGX 9.9 trillion in 2017. The growth in the sector investments is largely attributed to positive net flows due to increased investment earnings and contributions.
Investments in Uganda accounted for 66%, Kenya 27%, Tanzania 6%, 2% shared equally by Rwanda and Burundi. The major proportion of investments was held in government securities, accounting for 74.52%. Quoted Equities 13.95%, real estate 5.71% and unquoted equity 2.83% while fixed deposits, corporate bonds, guaranteed funds and other investments accounted for 3%. Table 2 provides a detailed breakdown of the sector’s investments.
Table 2: Retirement Benefits Sector Investment Portfolio
|December, 2017||December, 2018|
|Total UGX (Trillion)||1.3||0.17||8.4||9.9||1.4||0.2||10.2||11.8|
*Other investments include collective investment schemes, unit trusts, guaranteed funds, etc.
- These Investment Figures are based on Statutory Returns for period ending December, 2018.
Sector Assets Per Year: 2014 – 2018
|Asset to GDP Ratio||7.2||8.1||9||10||11.5|
- Sector performance improved, recording an increase in assets of 26.1% from UGX 9.2 trillion in 2017 to UGX 11.6 trillion in 2018. Growth in assets was due to contributions and investment earnings.
- In effect, the Sector Asset to GDP ratio improved to 11.5% in the 2018 reporting period compared to the 10% in 2017.
Sector Operational Indicators (UGX Billion)
|Operational Ratios (%)||2014||2015||2016||2017||2018|
|Benefits - Contributions||26||30||36||32||36|
|Cost - Contributions||13.4||10||10||10||10|
|Cost - Asset||2.1||1.3||1.2||1.2||1.2|
|Return on Investments||16||18.2||11.6||14||18|
Note: Assets and operational indicators based on Audited Financial Statements for two reporting periods (30th June, 2018 & 31st December, 2018).
Sector Indicators with Regional Comparisons
|Total Assets||11.6 Trillion UGX (Dec. 2018)||41.5 Trillion UGX (Dec. 2018)||15.9 Trillion UGX (Dec. 2018)|
|Sector Asset to GDP Ratio||11.5||12.98||7.5|
|Coverage Ratio (Workers covered/ Total Labor force)||14||20.1||5|
|Cost to Contributions Ratio||10.5||14.44|
|Cost to Income Ratio||13||19.29|
|Cost to Asset Ratio||1.2||1.41||5.6|
|Return on Investment||18||5.92||4.8|
|Schemes Arrangements as at December, 2018|
|No. of Mandatory Schemes||2||1||2|
|No. of Occupational Schemes||63||1188||13|
|No. of Informal Sector Schemes||2||1||1|
* Uganda’s assets and operational indicators based on Audited Financial Statements for two reporting periods (30th June, 2018 & 31st December, 2018).
**Tanzania experienced major Pension reforms that led to the merger of 7 Mandatory Schemes in to 2 Schemes.