OUR PERFORMANCE:
Outlook
We have presented our integrated report to provide all our stakeholders with balanced and transparent information, which can assist them in making more informed assessments of the organisation’s prospects (including its viability/ sustainability) and value creation ability into the future.
The information in this outlook is essential when reporting to stakeholders as it completes the value creation story of the Fund as told in our report, which will also continue to evolve over coming years.
The information below covers the organisation’s strategic path ahead – the leadership’s view of the material uncertainties, disruptive factors, challenges that may affect the achievement of the strategic objectives and the potential implications for the organisation and of course the opportunities that have been identified. We present the information under each of the six capitals.
Increasing
Reducing
Stable
Increasing
Reducing
Stable
Financial Capital
Strategic objectives
Challenges, uncertainties, and disruptive factors
Key challenge:
The Fund has shown robust annual performance throughout the reporting period. However, we encountered a few challenges, including lower-than-expected occupancy rates and reduced unit sales, which affected revenue generation from our real estate portfolio. In addition, we faced issues with low compliance rates which has a detrimental effect for members’ long-term social security.
Mitigating factors/opportunities
Measures undertaken to address the challenge:
During the year, we enhanced our Whistleblower platform to allow members to report non-compliance, enhancing overall compliance. We also upgraded our AI integration with the Uganda Revenue Authority to automate the creation of social security bills for employers, addressing under-declaration issues and increasing value for our members.
Additionally, we established the foundation for strategic partnerships with government bodies and other key collaborators to tackle obstacles in the real estate sector. This groundwork aims to enhance the prospects of our real estate portfolio by addressing and overcoming the factors that are currently impeding us.
Trend during the reporting period:
Our annual collections totaled UGX 1,932Bn, exceeding the budget by 0.63% and representing a 12.5% increase compared to the previous year. Arrears and new registrations contributed UGX 157Bn, driving over 70% of this growth. Additionally, we registered 8,374 employers, up from 6,827 the previous year, reflecting a 23% increase.
As of the end of June 2024, the Fund’s actual growth exceeded the target by UGX 1.03 trillion. Our asset size increased by 19.2%, rising from UGX 18.56Tn the previous year to UGX 22.13Tn. This growth was primarily driven by unrealised gains, including UGX 255Bn in foreign currency gains and UGX 270Bn in capital gains.
Despite the challenges presented by rising global supply chain costs, we are committed to enhancing cost efficiency throughout our operations. Notably, we have achieved a cost of administration of 1.0%, surpassing our target of 1.08%.
Outlook
Our strategic focus will be on implementing key actions that align with our growth and development objectives. This includes maximising value from partnerships by enhancing collaborations, improving our voluntary product offerings to better meet member needs, refining asset allocation strategies to optimise returns and manage risks, and addressing challenges in real estate development through innovative solutions and improved project management.
Together, these efforts will drive us towards a more successful and resilient future, ensuring we effectively meet our goals and deliver greater value to our members which still remains guaranteeing an interest on member savings that surpasses long-term inflation rates by a margin of at least 2%.
Trend
Committee oversight
KPI:
Manufactured Capital
Strategic objectives
Challenges, uncertainties, and disruptive factors
Key challenge:
Delays in payment of member benefits.
Mitigating factors/opportunities
Measures undertaken to address the challenge:
During the year, we focused our efforts on optimising OctoPAS to enable straight-through processing across core pension services such as registration, contribution, and claims. This optimisation is crucial for enhancing efficiency, reducing manual interventions, and improving the overall member experience.
Trend during the reporting period:
Although we have not fully met the 1-day target, we have made notable progress that has improved the member experience. The benefits payout turnaround time has remained relatively stable at 10.1 days, showing only a slight improvement from the previous year's 11.9 days, mainly due to system limitations.
We are now investing substantial resources and effort into business process re-engineering and system customisation to enhance and expand our product and service offerings. We are confident that these efforts will ultimately enable us to reduce the turnaround time to one day, increase the number of beneficiaries, and address process challenges, particularly at the verification stage, as well as manage cash flow issues during peak periods when interest is declared.
Other key developments during the year included transitioning 44.8% of claims applications to digital formats to reduce manual interventions, and launching an AI-driven financial literacy agent that supports users in English, Luganda, and Swahili, enhancing financial education and accessibility.
Outlook
In the upcoming year, we will concentrate on building new capabilities by utilising our internal expertise to enhance OctoPAS. Our main initiatives will include developing an internal compliance module to ensure regulatory adherence, integrating value-driven features into the system, and creating a strategic roadmap for medium-term digitisation.
These efforts are expected to generate significant cost savings, speed up the launch of new products, and implement an ERP system to centralise data and decision-making, which will also involve deploying virtual customer service agents and language-based support to improve customer interactions.
Trend
Committee oversight
KPI:
Human Capital
Strategic objectives
Challenges, uncertainties, and disruptive factors
Key challenge:
Ensuring that our workforce remains agile, flexible, and engaged amidst the changing operating environment.
Mitigating factors/opportunities
Measures undertaken to address the challenge:
During the year, we introduced several key initiatives to strengthen and empower our workforce, including manager coaching, cross-functional collaboration through agile projects, HR training for non-HR managers, and strategic partnerships for employee growth. These efforts are designed to build a resilient and adaptable workforce equipped to handle current and future challenges. Employee engagement remains a top priority as we strive to create an inclusive workplace where every voice is valued.
Trend during the reporting period:
Employees remain at the core of ensuring a robust and enduring Fund. Compared to the previous financial year, we have seen a notable improvement in employee satisfaction scores. Throughout the year, the Fund attained a staff engagement score of 89%, largely due to several key initiatives aimed at boosting engagement and performance.
During the year, we enhanced innovation and productivity by adopting agile methodologies, creating national subject matter experts, and providing placement and secondment opportunities for employee development. Significant organisational and structural improvements included reconstituting the staff committee for better representation and finalising a new organogram to mitigate risks from the Voluntary Early Retirement initiative.
We also prioritised employee well-being by integrating mental health support into our operations and advancing inclusivity, particularly with a focus on gender parity. Additionally, we optimised performance and communication by updating job descriptions and grades to align with organisational goals and strengthening transparency through improved communication channels.
Outlook
In the coming year, we will focus on advancing our team through key initiatives aimed at improving talent management, performance, and innovation. We will establish a comprehensive, digitised talent management journey that supports employees from application through to alumni, fostering growth and seamless integration. We will also introduce a new performance management approach centred on clear goals, continuous feedback, and customised development plans to boost productivity and engagement. Additionally, we will prioritise enhancing innovation and productivity by implementing agile methodologies and promoting a culture of continuous improvement, enabling employees to contribute more effectively and drive the Fund’s success.
Trends
Committee oversight
KPI:
Social and Relationship Capital
Strategic objectives
Challenges, uncertainties, and disruptive factors
Key challenge:
Delays in gazetting new regulations, which have significantly impeded our ability to develop a compelling value proposition for our voluntary offerings.
Mitigating factors/opportunities
Measures undertaken to address the challenge:
To tackle the challenge of delays in gazetting new regulations, we took several proactive measures. We actively engaged with regulatory bodies through regular communication and meetings to expedite the approval and implementation process.
While awaiting the new regulations, we completed the development and pilot testing of the Smart Life Voluntary Savings Plan. Additionally, throughout the year, we strategically utilised our existing partnerships and formed new ones, including successful collaborations with Ministries and Government departments. These efforts expanded our network and improved our capacity to serve a wider range of clients and stakeholders.
Trend during the reporting period:
The overall CSI score has experienced a notable improvement, reaching 88%. This can be attributed to an improvement in the Fund’s brand health rating, which rose from 71% to 78% this year, driven by increased member confidence in the Fund’s engagement and perceived value. Members feel more secure about their investments and value the competitive returns, boosting overall trust and positive perception of the brand.
Additionally, positive sentiment has increased significantly, rising from 56% in July 2023 at the beginning of the financial year to an average of 92.1%. This improvement is closely linked to increased exposure and enhanced engagement initiatives.
Outlook
To remain relevant to our members and also stay competitive in the market, we will focus on accelerating the delivery of valuable products and services to our clients. We see significant growth potential in three key areas: insurance partnerships, trusts, and wealth management.
We will further implement our new business model, which emphasises streamlined processes, innovative technologies, and a client-centric approach. Our goal is to introduce the Smart Life Savings Plan, aimed at offering individuals a compelling value proposition for voluntary savings.
Trends
Committee oversight
KPI:
Natural Capital
Strategic objectives
Challenges, uncertainties, and disruptive factors
Key challenge:
Combating climate change; taking a sustainable approach to waste management; and minimising usage of water resources and energy.
Mitigating factors/opportunities
Measures undertaken to address the challenge:
Our ongoing commitment to environmental sustainability is reflected in our comprehensive efforts to enhance water and energy efficiency, reduce waste, and support a paperless office. We have implemented various measures to optimise water and energy use, such as installing energy-efficient systems, conducting regular audits, and adopting conservation practices.
Additionally, our push for a paperless office involves continued advocacy for full transitioning to digital documentation and communication methods, which not only reduces paper consumption but also streamlines our processes and improves operational efficiency. These initiatives collectively demonstrate our dedication to lowering our environmental impact and fostering a more sustainable workplace.
Key outcomes:
Outlook
In the coming year, we aim to achieve a 20% reduction in energy consumption over the next three years, with the previous fiscal year serving as our baseline. To support this goal, we will implement regular maintenance of transformers, stabilisers, and HVAC systems to ensure they operate at peak efficiency. Additionally, we will explore the installation of solar panels in the parking tower to harness renewable energy. We also plan to enhance energy efficiency by installing timer systems for security lights, ensuring they are only active when needed and are not left on during daylight hours.
We are targeting a 15% reduction in water consumption within the next two years. We will also focus on improving waste management by ensuring all waste from our buildings is diverted to city pipelines, in accordance with local waste management regulations. These initiatives reflect our commitment to advancing our sustainability efforts and minimising our environmental footprint.
Trends
Committee oversight
KPI:
A NEW DAY - CREATING SHARED VALUE FOR SUSTAINABLE GROWTH