OUR BUSINESS

MATERIALITY DETERMINATION PROCESS

Material matters are those issues that could substantially affect our ability to create value in the short, medium and long term. These matters influence our strategy and how we manage our associated risks, as well as opportunities we explore as a result of these factors.

The process we follow to determine our material matters is as follows:

Materiality themes

Adapting to the new normal

Material matter - Covid-19

Strategic objectives

Increase customer satisfaction
Increase profitability

Capitals impacted

Financial

Human

Manufactured

Social & Relationship

Risks

Business/Strategic Risk

Negative impact on collections and investment income

Changes to benefit claiming patterns and cashflows

Legal and regulatory changes

Increased public criticism

Mitigation Response

Short Term

Stakeholder management

Adjustments to the Strategic Asset Allocation

Cashflow planning

Brand building campaigns

Mitigation Response

Long Term

Monitoring market variables and adjusting the portfolio mix to respond to the changing market environment

Risks

Operational Risk

Staff being infected with Covid-19

Staff working remotely

Disruption to business operations

Mitigation Response

Short Term

Strict hygiene (washing hands/sanitization), wearing masks and social distancing

Provision of the necessary tools for staff to work remotely (i.e. home)

Provision of support to staff infected with the virus

Staff re-skilling for digital service delivery

Mitigation Response

Long Term

Systems capability in place for on and offsite working

Opportunities and impact on business model

Strengthening of business continuity and disaster recovery plans

Improving efficiency of operational processes and communication through automation and use of digital platforms

Review business and strategic imperatives

Accelerating digital transformation by increasing services hosted on electronic channels

Targets

Return on Investments 12.67%

Collections - UGX 1.5 Tn

The impact of Covid-19 on our operations cannot be understated. FY2019/2020 was heavily impacted by Covid-19. In FY 2020/2021, the Fund has recovered and the outlook is promising. Collections and Investment income results were above target.The pandemic has impacted how business is conducted, what members and employees expect and where and how employees work. Business operations and people practices continue to be adapted during unprecedented levels of uncertainty about the future, which accelerates the pace of digital transformation.

Materiality themes

Changing saver/member expectations

Material matter - emergence of a digital lifestyle accelerating further automation

Strategic objectives

Increase customer satisfaction
Increase profitability
Increase productivity

Capitals impacted

Financial

Manufactured

Social & Relationship

Risks

Risk of becoming irrelevant

Failure to meet the physical and digital engagement/servicing of our members and future members in a rapidly evolving society

Mitigation Response

Short Term

Deploy NSSF Services on all digital platforms, Web, mobile

Mitigation Response

Long Term

Enable members to access the whole range of services directly on their phones without the intervention of a person

Opportunities and impact on business model

The Fund can deliver its services to members over a digital platform. Members can seamlessly access the Fund at their convenience while accessing other lifestyle applications

Traditional models of service delivery can be replaced by cheaper, more scalable distribution options that have been enabled by new technologies and that are now commonplace. We relied on and promoted our extensive digital/online capability to enable members to take up our offering and transact with us.

95% of our people can work effectively from home/remotely – underpinned by revised policies and processes/procedures

Traditional models of service delivery can be replaced by cheaper, more scalable distribution options that have been enabled by new technologies and that are now commonplace. We relied on and promoted our extensive digital/online capability to enable members to take up our offering and transact with us.

Targets

Digital engagement index score of 100%

Increase in penetration 35%

While socio economic factors will impact the extent of access to the means that enable a digital existence, member behavior has changed. They are living dual lives - a physical one and a digital one. The Fund must operate in both places. In addition to this, the younger, more technologically connected generation, does not understand or appreciate physical/ brick and mortar service delivery channels. They are also not patient and want services provided immediately and conveniently. The Fund therefore must adapt and be present in a way that is expected by this future generation of savers.

If the NSSF Amendment Bill is passed, it will give us an opportunity to increase coverage, collections and returns through limiting benefits growth by raising the retirement age to 60 years, and it will help us increase coverage, especially in the informal sector.

This change in lifestyle coupled with the remote working environment has exacerbated the acceleration of digital transformation

Materiality themes

Future fit organisation

Material matter - our new pension administration system IT infrastructure upgrade

Strategic objectives

Increase customer satisfaction
Increase profitability
Increase productivity

Capitals impacted

Financial

Manufactured

Risks

Business/Strategic Risk

Lack of agility and adaptability to expand

Inability to fully embrace 4th IR

Failure to embrace new ways of work

Failure to reorganise/realign business model to changing business/skills/ways of working requirements

Mitigation Response

Short Term

Deployment of the PAS

Mitigation Response

Long Term

PAS as a gateway for Pension services in Uganda.

SAAS service available, Fund management, Pensions administration, savings and credit cooperative societies (SACCOS) etc.

Opportunities and impact on business model

We are continuously evolving our business model to serve a large market, with a diverse range of social security needs, while fulfilling the core mandate to secure the retirement needs of Uganda's workers

Deployment of the new PAS is central to our IT strategy. This technology will enable the Fund to deliver seamless digital services via the branch network and the digital channels. To achieve this the Fund must be prepared. Structures and processes and policies must be changed to enable rapid adoption of the new system. Change management is required to adjust to the new environment

This deployment is part of a wider IT strategy to automate as many processes as possible so that our staff are free from routine and repetitive tasks to be available to advise members on the best options for a better retirement. These automations will also enable the Fund to provide uninterrupted services to our members and stakeholders.

These changes mean that we must restructure the Fund so that the best people are put in key positions where their ability to create value is maximised

Targets

PAS go-live November 2021

Pay out benefits within 1 day (2025)

To achieve our vision of becoming the Social Security provider of choice in a digital environment, the Fund made a strategic decision to upgrade the Fund Administration system. This upgrade will enable the Fund to efficiently deliver services and administer new benefits for members. It will also provide institutional solutions for SACCOS, pension administrators and fund managers.

Materiality themes

Regulatory Restrictions

Material matter capitals | NSSF Act amendments

Strategic objectives

Increase customer satisfaction
Increase profitability
Increase productivity

Capitals impacted

Financial

Manufactured

Intellectual

Social & Relationship

Risks

Reputation Risk

Perceived reluctance by the NSSF to provide midterm access to its members

Legal Risk

The final laws and regulations may negatively impact the Fund in the short-to medium-term

Mitigation Response

Short Term

Continuous sensitisation of members through financial literacy programmes

Stakeholder management

Structure, process and system changes to be able to rapidly implement the changes in legislation

Cashflow management

Mitigation Response

Long Term

Policies and procedures are in place to administer the Fund in the new regulatory environment

Opportunities and impact on business model

The President has agreed to assent to the NSSF Amendment Bill. He has also agreed to pay all members who have attained the age of 45 years and have saved for more than 10 years up to 20% of their accumulated savings

The Fund Board will also be able to develop new benefits for members

Targets

Number of new benefits developed -2

We operate under a mandate from the National Social Security Fund Act 1985 and in an environment regulated mainly by the Retirement Benefits Regulatory Authority (URBRA) under the URBRA Act 2011. Within the country’s and regional pension and general legal frameworks, there are both opportunities and risks for us to enable a better life for our members.

If the NSSF Amendment Bill is passed, it will give us an opportunity to increase coverage, collections and investment returns.

Customer demands such as midterm access continue to affect the Fund’s brand and purpose. This comes with more interest in social security products from the informal sector.