Makerere retirement scheme set to pay 13.4% interest

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

As of June 30, the Fund value stood at Shs409.2b, reflecting an annual growth of 16.2 percent (Shs56,838,969,000) from the previous year (Shs352.4b), and 95 percent growth over a five-year period. 

The 13.4 percent interest, a total of Shs44.9b, was declared by the scheme’s chairperson of the board of trustees, Dr Elizabeth Nansubuga, during the members’ 14th Annual General Meeting (AGM) at Makerere University on Thursday.

The interest was credited to the accounts of the scheme’s 8,950 members.

“For the Financial Year under review, considering the net assets available for member benefits of Shs409.4b and adjustments made, the Board of Trustees distributed Shs44,873,804,000 to the members’ opening balances for the Financial Year 2023/2024. As a result, the trustees have awarded an interest rate of 13.40 percent to the members – the highest rate in the last five years,” Dr Nansubuga declared.

Contributions remain a critical pillar of the scheme’s financial health. According to Dr Nansubuga, the sponsor—Makerere University—remitted all contributions for the 2023/2024 financial year, with the total contributions collected/received amounting to Shs34.4b.

Shs28.7b of this was for staff on the main Makerere University payroll, Shs5.37b for contract and project staff, while Shs199.3m was for AVC subscribers and MURBS Secretariat. 

“It is noteworthy that contributions from the sponsor have been remitted in a timely manner, ensuring compliance with the governing regulations. This level of compliance reflects the sponsor’s continued commitment to ensuring a dignified retirement of its staff,” she said, adding that the Board remains committed to ensuring that the contributions are remitted consistently and in a timely manner; managed prudently and invested in line with the Scheme’s Investment Policy Statement.

Dr Nansubuga also attributed the scheme’s good performance to “a favourable outcome in a key legal case that had significant implications for the scheme.”

She added: “As you all know, we invested in real estate where the Scheme challenged Uganda Revenue Authority’s tax assessment of Shs600m as withholding tax. We went to court and won the case. This tribunal ruling, which was awarded with costs not only preserved member funds, but also set a precedent, affirmed the legal acumen and robustness of the scheme, and reinforced the integrity of our operations.”

The total benefits paid out during the Financial Year 2023/2024 amounted to Shs25.06b paid to 777 members, more than double the number of members (342 members) paid out in the previous year.

More than half (51 percent) of the benefits paid (Shs12.7b) were attributed to normal retirement benefits for 161 members. 

Notably, this financial year being the ‘year of midterm’, the Trustees also paid out Shs11.2b to 594 members; of which 64 percent were male, and the average pay out period was 10 days. 

Additionally, the scheme also paid out Shs2.9b as a final pay out to 658 in-house beneficiaries. 

According to the Audit Committee chair for CPA, Mr David Ssenoga, the scheme significantly reduced its debt burden of Shs8.85b through the complete recovery of the In-House Retirement Benefits (IHRBS) and contribution arrears by the sponsor. 

“In house debt was a long outstanding debt (inclusive of interest) totalling to Shs25.1b due from Makerere University, due to arrears of the IHRBS. During the FY 2023/2024, the Scheme recovered Shs8.1b which offset the total in-house debt,” he said, adding that 86 percent of the scheme’s funds is invested in Government Securities, 4.4 percent in real estate, 9,4 percent in unit trusts and 0.2 percent in Equities. 

“Government securities offer a more stable return,” he added.