The Board of Trustees (BoT), Makerere University Retirement Benefits Scheme (MURBS) has reassured its members that it has laid strategies to minimize impact of the upcoming election periods in 2021 and 2022 for Uganda and Kenya respectively on the Scheme’s growth. These reassurances were made by the Chairperson, BoT, Mr. Grace Wilber Naigambi as he delivered his remarks at the 9th Annual General Meeting held in the Central Teaching Facility 2 (CTF 2) Auditorium, Makerere University on 22nd October 2019.
“On behalf of the BoT, I would like to reassure Stakeholders that the future prospects of the Scheme remain highly promising… MURBS’ governance will lay emphasis on instituting value adding strategies to grow member funds that will enable the Scheme celebrate its true purpose of securing the retirement of members” remarked Mr. Naigambi.
The Chairperson shared that MURBS’ medium to long-term targets include attaining a largest member benefit of UGX500million by 2023 and achieving 100% income replacement ratio by 2027. As at 30th June 2019, only 1.15% of the Scheme’s 3,793 members had benefits in the range of UGX200-250million while the current income replacement ratio stands at 23%.
MURBS foresees the possibility of achieving such targets based on incentives like the Government’s reduction of withholding tax on long-term bonds with outstanding maturity of ten years or more from 20% to 10%. “The change has increased investor appetite for long-term bonds” added Mr. Naigambi.
At 69.1%, Treasury Bonds constitute MURBS largest fixed income assets and largest asset class. A reduction of withholding tax on these will translate into increased returns for members. As at 30th June 2019, the fixed incomes had a 90.57% impact on overall returns.
The Chairperson further shared that MURBS had after a serious evaluation of its investment asset classes resolved to divest from equities and strategically invest in real estate/property. Following the presentation of the Scheme performance for the Financial Year 2018/2019 on 11th October 2019, the BoT introduced its first Property Project; Ivory Estate Sonde. “The BoT is convinced that through this strategy, the Scheme will greatly enhance its investment income.”
The Chairperson in his remarks further stressed the need for members to embrace the Annuity arrangement as opposed to the lump sum payment upon retirement. During the financial year 2018/2019, MURBS operationalized the annuity option for retirees with minimum benefits of UGX100million. This figure was arrived at as a basic minimum amount that can return a reasonable monthly income after retirement. Annuities are available for guaranteed periods of ten, fifteen and twenty years.
Sharing more about MURBS premier property investment; Ivory Estate Sonde, the Secretary BoT, Dr. John Mulindwa Kitayimbwa said this was the first real estate project to feature solar street lighting. He added that the Estate will feature roads named according to halls of residence. These will be eight metres wide for access roads and twelve metres wide for main roads. Site visits for members have been planned for 24th, 29th and 31st October 2019.
Article by Public Relations Office
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