Committee purpose and how it contributes to value creation

The role of the Finance Committee of the Board is to assist the Board to fulfil its oversight responsibility and mandate in the following key areas:

• Determination of the annual and supplementary budget involves making and submitting to the Minister, for approval, estimates of the Fund’s income, its capital recurrent, and other expenditures likely to be incurred for the ensuing year
• Review and approval of the audited financial statements prepared by management
• Review provision of proper books of accounts and records with respect to the Fund’s financial transactions, assets, and liabilities
• Recommendation of the interest rate for declaration depending on the Fund’s realised income
• Effective financial management of the Fund and its assets
• Review of the Fund’s accounting policies and principles
• Reviews of allocated departmental policies and strategies

The Departments the Committee has oversight of are Finance, Commercial, Technology and Enterprise Solutions, and Procurement and Disposal

Declaration

The Finance Committee of the Board complied with its mandate for the year under review and all scheduled meetings were held.

Key activities in FY2023/2024 included review, monitoring, and recommendation of:

• The proposed interest for FY2022/2023
• The financial performance for the FY2023/2024
• The NSSF Budget for the FY2024/2025
• The strategic targets for the Fund and alignment of performance measurements
• The integrity of the financial statements and other information to be provided to the members to ensure that they represent a clear and accurate assessment of the Fund's position and performance
• The Fund’s procurement contracts
• Quarterly department updates
• The commercial department’s policy update in line with amendment of the NSSF Act

Key achievements:

• Contained costs within budget
• Met and exceeded income targets
• Met and exceeded contributions targets
• Conducted all meetings with sufficient collaboration
• Ensured smooth operations between the board and management
• Streamlined procurements, easing the board’s oversight function
• Conducted training sessions as a finance committee, equipping members with skills to improve oversight functions

Challenges during FY2022/2023:

• Continuing to deal with the aftermath of the probes/inquiries by different Government agencies
• Economic volatility in the economies where the Fund holds investments, affecting returns
• Disruptions in the real estate portfolio due to persistent land ownership disputes which have slowed down project implementation

Key learnings from FY2023/2024

• Need for closer collaboration between the Finance Committee and IPMC
• Need for closer collaboration between the Finance Committee and the ARC Committee, as budget outcomes are influenced by how the Finance Committee manages risks
• Continuous skills improvement is necessary; the Finance Committee oversees several departments, requiring a diverse knowledge base and skills for prudent conduct, necessitating continuous training

Key focus for the following year FY 2024/2025

• Monitor the economic outlook to manage the foreign exchange risk exposure of the Fund
• Manage costs and maximise income through focusing on risk mitigation measures and conducting stress testing of various parameters
• Develop a succession planning strategy for 2025/2035; the Fund’s maturing membership base poses a risk of declining growth, so the committee will focus on regulations that increase flexibility for creating new products
• Focus on service delivery to ensure customer satisfaction levels are maintained and improved
• Focus on internal development of software by the internal IT team