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Friday, July 8, 2011

Govt plans to help its senior citizens

Tuesday, 15 February 2011 22:06
By Daniel Msangya,
The Citizen Correspondent

Dodoma. The government is preparing the Social Protection Framework which would help special groups, including senior citizens, benefit from social funds, the Bunge was told here yesterday.

The deputy minister for Health and Social Welfare, Dr Lucy Nkya, told the House that the Tanzania Social Action Fund (Tasaf) and Help Age International have started the process. This would facilitate and make members of the public recognise the needs of old people, she said.

Members of the public would also be shown how to access small tokens through cash transfers to enable old people survive and sustain their lives, he said.

He explained that Help Age International has been operating a pilot project in Karagwe District, Kagera Region. On the other hand, Tasaf is conducting another pilot project in Bahi and Chamwino districts, Dodoma Region, as well as Bagamoyo District in Coast Region, he said.

According to him, the government provides a number of humanitarian services through the Social Welfare Department. These include financial assistance to the poor and old people for making them have an income.

She was answering a question from Prof Kulikoyela Kahigi, (Bukombe-Chadema). The latter had asked the government to explain what plans were set aside to support old people. He said most were so vulnerable and poor to afford their daily needs, including food, clothes and healthcare.

Reacting to another supplementary question from Mr George Simbachawene (Kibakwe – CCM), the deputy minister said special health services had been established in every hospital. He cited Dodoma regional government hospital which had a special desk for the aged.

He said apart from the desk, a special doctor had been reserved to attend the senior citizens.

The Ministry of Labour and Social Security in collaboration with HelpAge International investigated the feasibility of achieving social protection for older people through the implimentation of a universal noncontributory pension.

COMMENTS
The feasibility report found that giving a minimum income to all Tanzanians over over the age of 60 was affordable and implementable by the Government, and would cost around 1% of GDP depending on the level of the transfer.

Furthermore, as well as following in the steps of Southern African countries by implementing an old age grant as the first stage in building social protection system, this would lift 1.5 million people out of poverty and have long term impacts on growth and human development.

For more information on the findings please visit www.pension-watch.net and access the full report here pension-watch.net/.../...
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COMMENTS
The government can not help our senior citizens if they keep financing legislators with billions of money annually.The government have a good money to care old people but our greedy legislators want to feed themselves first before anyone else. We are dead and burried running the country with such greed legislators. Look over how much we pay in salaries and allowances to settle the legislators' free drivers and their night allowance to ride with their bosses? Let the legislators drive their own cars and save money to help our seniors citizens with their medical bills.
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Regulator to improve social security

Sunday, 02 January 2011 21:36
By Polycarp Machira
The Citizen Reporter

Dar es Salaam. Tanzania has potential opportunities that remain uncovered by the social security schemes and which call for the government’s intervention to increase coverage.

The establishment of the Social Security Regulatory Authority (SSRA) in effect is expected to play an important role in regulating and supervising the provision of social security services in the country.

It has been created under the Social Security Regulatory Authority Act, 2008 which President Jakaya Kikwete assented to in June last year, and became operational in September this year.

The newly-enacted law will now help supervise and regulate the functions of all social security schemes in the country. The authority has the role of ensuring the funds are sustainable, project interests increase coverage and reduce the burden to the government.

Tanzania trails Kenya and Uganda in security scheme coverage. Only 6.5 per cent of Tanzania’s working population and 3.5 per cent of the entire population are covered by the social security schemes.

At least eight per cent of the Kenyan population is covered by the schemes, compared to 11 per cent of the Ugandan population which is covered by the social security schemes.

The SSRA director general, Ms Irene Isaka, told reporters in Dar es Salaam this week that the authority would facilitate the extension of social security coverage to non-covered areas, including informal groups, and conduct awareness, sensitization and tracing on social security.

“We look forward to increasing coverage to farmers, pastoralists and other rural-based populations that seem to have been neglected by the funds. The issue here is to create awareness so that such groups of people may see the importance of being included in the security funds” said Ms Isaka.

She said the authority has established a taskforce that draws its members from the Attorney General’s chamber, the ministry of Finance, the Bank of Tanzania, experts on Social Security from the International Labour Organization (ILO) and the ministry of Labour, Employment and Youth Development to address key challenges ahead.
Some of the key challenges facing the social security sector include fragmented legal and regulatory framework where different schemes report to different ministries.

“Most funds just provide traditional benefits without flexibility to cover variety of pensioners’ needs” she said.
Every pension, according to the authority has its own investment policy, some of which are not favourable to pensioners. There are seven pension funds under different ministries, with different rules and regulations, but have limited coverage.
At least three schemes - Parastatal Pension Fund (PPF), Public Service Pension Fund (PSPF) and Government Employees Pension Fund (GEPF) - report to the ministry of Finance.

The National Social Security Fund (NSSF) reports to the ministry of Labour, Employment and Youth Development while the Local Authorities Pensions Fund (LAPF) reports to the Prime Minister’s Office (Regional Administration).
The National Hospital Insurance Fund (NHIF) reports to the ministry of Health and Social Welfare.

To achieve the desired goals, the regulatory authority plans to conduct actuarial valuation of all social security schemes in the country by the first quarter of next year in an effort to solve problems facing the sector. The valuation, among other things, will determine the lifespan of the security schemes as some may not live to benefit pensioners at the retirement age.

A well-designed social security scheme, according to Ms Isaka, should be broad-based with adequate coverage and be sustainable for over 70 years. The valuation will also help determine regulations for transferability of membership from one scheme to the other.

As at now, the rules and regulations of the social security funds make it difficult for workers to transfer their benefits to another fund in case the worker changes his job. It has also been noted that the pensions have different pension factors, although all have the same contribution rate of 20 per cent, they have different benefit packages, a factor which is to be reviewed too.

She said there is a need to improve the sector so as to increase national pension coverage, adding that the institution would, among other things, be responsible for advising the government on how to extend the social security coverage into other sectors, including the informal sector.

Data shows that 10.5 per cent of the population comprises paid employees, 1.8 per cent are self-employed with employees, while 9.1 per cent are self-employed without employees.
According to the DG, the authority that was formed two months ago would ensure schemes remain secure and sustainable, members’ interests are protected and coverage is increased.

It would also ensure that funds are invested according to rules or investment guidelines as the government looks at the possibility of widening coverage of social security services in the country, to include people who are self-employed in the informal sector.
It would conduct public awareness for all stakeholders of social security before issuance of regulations and guidelines.

On the other hand, the authority will put in place capacity building programmes and establish a research department with a robust database and an in house actuary to facilitate development of social security products.
Recently, the World Bank’s Financial Sector Support Project (FSP) prompted the Bank of Tanzania to invite consultants to bid for the reviewing of the existing investment portfolio of the social security schemes in the country.

The objective was to review the funds’ investment markets, portfolios and policies with a view to structuring sharp investment guidelines for them.

Apparently, the new project seeks to control the hitherto unregulated schemes. Allegations are high that some of the funds are investing in unviable projects, lending to non-members and taking overly long to issue members’ benefits.
It is expected that the harmonization of the legal and regulatory framework will start during the first quarter of 2011.

The regulator will make sure the schemes remain secure and sustainable, members interests are protected, there is increased coverage and funds are invested according to rules or investment guidelines.

It would ensure appropriate disclosure as schemes, managers and custodians provide timely information. Above all, it would guarantee that shortfalls are identified and appropriate actions taken.

Monday, July 4, 2011

NSSF members` access to accounts automated

NSSF members` access to accounts automated
By Stella Barozi
4th July 2011

National Social Security Fund members will by the end of this year have started accessing information on their accounts electronically.

This is thanks to the Fund’s identification management system, introduced to the public during last year’s Dar es Salaam International Trade Fair and now become fully operational.

The development is expected to spare members the problem of spending time queuing for long hours at NSSF offices for a service they will now get in minutes.

Winston Mundigile, Principal Systems Officer (Networking) with the Fund, said at the Dar es Salaam International Trade Fair yesterday that the machines to be used have taken long to get into business because not all NSSF members have smart cards to be used in the “info-kiosks”.

“Smart cards are a must for members to access their information in the kiosks, to be installed at all NSSF offices soon,” he said.

He described “info-kiosk” (information kiosks) as self-service terminals placed strategically in high profile public areas, where it provides easy access to information and remote services for many hours.

“When we introduced the technology, we realised that members’ enrolment to get smart cards was far below our expectations and so we had to invest more efforts in enrolling more members,” explained Mundigile.

It was about three years ago that NSSF embarked on a countrywide exercise to replace old membership cards with the current electronic ones.

To ensure that all members have smart cards, the fund has been visiting its members at their respective workplaces and NSSF Director of Information Technology Said Masimango said 70 per cent of their 516,000 members already have smart cards.

“We want to change our service provision trend by taking our services to customers wherever they are rather than having customers seeking services at NSSF offices,” he noted.

The info-kiosks, which will use the biometric system (Automated Finger Print Identification System), will be placed at NSSF’s 23 regional offices, 14 district offices and 11 sub-district offices countrywide.

Masimango said the system will provide members with easy access to information like statements, employers’ remittances of employees’ contributions to the Fund and general information about the Fund without involving NSSF workers.

He added that the biggest advantage was that employees whose contributions were not remitted to the Fund would be able to make follow-ups with their employers before it got too late.

He confirmed that some employers deduct money from their employees’ salaries for NSSF contributions but don’t take the money to NSSF.

He said the information will be both in English and Swahili and one will be able to get a hard copy of their information if they wish as printing is possible.

Masimango explained further that they are busy working on translations as the machines are meant to operate in English language, adding that the machines will be deployed at mining companies first on a pilot basis.

The new technology, already in use in more than 11 countries in this part of Africa, is widely expected to cut the incidence of inefficiency (mainly the perpetually “missing files”), corruption and mismanagement commonly affecting national social security funds.
SOURCE: THE GUARDIAN

Social security net must be widened

By Editor
24th June 2011

Editorial Cartoon

While all international conventions recognise social security is a universal need and a basic human right, only one in five people in the world has adequate social security. And according to the International Labour Organisation (ILO), half of the world’s population is without any social security protection.

Tanzania too is in the same precarious situation as according to the Social Security Regulatory Authority (SSRA) Director General, Irene Isaka, only 3.5 per cent of over 40 million Tanzanians are currently registered with social security funds.

The DG told this newspaper in an exclusive interview that the percentage was not healthy for many Tanzanians because when they get older they would not be able to receive any security protection.

It is for this reason we view as a timely and positive move the plan by SSRA to increase the number of Tanzanians enjoying social security to 5 per cent by 2014 in the coming three years.

We specifically laud the move in the envisaged plan to increase social security coverage to farmers, pastoralists and other rural based populations so far neglected by the funds.

However, we believe time is ripe to gun for wider coverage – beyond the planned 5 per cent – if social security funds could target the country’s ever-growing informal sector which is billed to be the second biggest employer after agriculture.

Without an expanding industrial base, the majority of Tanzanians will for a long time to come continue to depend on agriculture and the informal sector for their livelihoods. And they need social security protection.

We strongly believe that this can be achieved if there is the political will as this may entail changes to the existing laws that established the various social security funds to develop new statutory schemes by extending existing or modified benefits to previously excluded groups.

We wish to urge the government to fully support the SSRA in its resolve as we believe Tanzania has potential opportunities that remain uncovered by the social security schemes if a well-designed social security scheme – which should essentially be sustainable and broad-based with adequate coverage – is put in place.

At the same time, we wish to appeal to social security funds to assist their members prepare for retirement instead of the current practice whereby members receive payment after they retire – sometimes too old and sick to put the monies into useful use.

The National Social Security Fund (NSSF) has taken the lead as, according to the Deputy Minister for Labour and Employment, Makongoro Mahanga, NSSF was currently looking into the possibility of providing housing and individual loans to its members using their contributions as collateral.

This is a welcome move which we think is long overdue, and should therefore be speedily implemented to enable members of the funds prepare themselves for retirement in good time so that they can be assured of comfortable lives upon retirement.

As mentioned earlier, Tanzania should strive for wider social security coverage while at the same time creating enabling environment for members of the funds use their contributions to the funds to improve their livelihoods.

For increased coverage, social security providers should target agriculture and informal sectors.
SOURCE: THE GUARDIAN

Wider social security coverage underway

By Felix Andrew
23rd June 2011

Authority aims at 5 per cent membership by 2014
Social Security Regulatory Authority Director General Irene Isaka briefs journalists in Dar es Salaam yesterday on her agency`s role. This was at the Public Service Week exhibitions going on at Mnazi Mmoja grounds.

The number of Tanzanians enjoying social security is expected to increase to 5 per cent by 2014 from the present 3.5, thanks to new strategies laid down by the Social Security Regulatory Authority.

Already the authority has started addressing six challenges which hinders smooth functioning of the social security funds countrywide.

Speaking to journalists in Dar es Salaam yesterday, the SSRA Director General Irene Isaka said currently only 3.5 per cent of Tanzanians are registered with social security funds.

The percentage was not healthy for the future of many Tanzanians, because when they get older they would not be able to receive any social protection, she said.

“We want to increase the percentage to at least 5 per cent in the coming three years if all things go well,” she said.

Isaka said they plan to increase coverage to farmers, pastoralists and other rural-based populations so far neglected by the funds.

She said an increase will necessitate changes to the laws which established the various social security funds.

“Currently the law does not recognise our authority. Once the Parliament has endorsed the changes we shall be able to implement our strategies,” she added.

Isaka said the authority has formed a research department which would study ways to increase the number of Tanzanians in the social security funds.

She said they had improved the communication department which would help sensitise Tanzanians on the role of social security funds. The SSRA also plans to establish social security week aimed at educating Tanzanians on its activities.

The DG named other challenges as transferability of members from one fund to another, depreciation of the value of shilling, lack of data and delayed member’s payments.

According to the DG, the authority that was formed early this year would ensure schemes remain secure and sustainable, members’ interests are protected and coverage is increased.

She also noted the task force which was established to address key challenges was about to complete its task

The taskforce drew its members from the Attorney General’s chamber, the ministry of Finance, the Bank of Tanzania, experts on Social Security from the International Labour Organization (ILO) and the ministry of Labour, Employment and Youth Development.

Experts say Tanzania has potential opportunities that remain uncovered by the social security schemes and which call for the government’s intervention to increase coverage.

A well-designed social security scheme should be broad-based with adequate coverage and be sustainable.

They say the authority should ensure that funds are invested according to rules or investment guidelines as the government looks at the possibility of widening coverage of social security services in the country, to include people who are self-employed in the informal sector.

Speaking to this paper in an interview, Dr Kingu Said Mtemi said some pension funds were not performing well, adding that there is a need for a review of the prevailing legislation to allow members to cross to funds that are more efficient.

He said time has come for the law to allow transferability of members from one fund to another to enable members pick those which can benefit them most.

Mtemi also urged the government to make sure that pension funds remain secure and sustainable.

“Those who have been tasked to secure members’ interests should make sure that they are protected and coverage is increased and the funds are invested according to the prevailing rules or investment guidelines,” he said.

He told the pension funds to review the members’ payment system saying most of them have become outdated.

“The shilling is ever depreciating, inflation is skyrocketing and even the taxes have gone up, these funds should now start paying members according to the value of the shilling,” he stated.

At the moment, only 3.5 per cent of Tanzanians are covered by the funds, while in Kenya coverage is 8 per cent and Uganda is 11 percent.
SOURCE: THE GUARDIAN

Social security funds urged to review benefits

By Lusekelo Philemon
18th May 2011

Local social security funds have been challenged to restructure their schemes with a view to improve retirement benefits for their members.

National Institute of Productivity (NIP) management analyst Anselm Namala threw the challenge when presenting a paper at Government Employees Provident Fund (GEPF)’s 3rd stakeholders’ conference held here recently.

He suggested that members’ benefits should reflect the actual living standards in the country. “Health, housing schemes and monthly pensions should be tailored to help low income earners,” said Namala.

He explained, “Again, one of the pension funds’ products is preparing members for life after retirement. This course has proved to be very useful to most retirees. My experience shows that retirees need something more than money.”

Namala further said retirees should be prepared psychologically before attaining the retiring age. “Without good plans, retirees cannot succeed after retirement life,” he stressed.

He also expressed concern over the current working environment for not letting employees to retire prematurely or early and benefit like those retiring after attaining the minimum or maximum age.

“That is why retirement is regarded by some employees as a killer ghost,” said Namala, adding that among key challenges facing social security systems at the moment is limited coverage due to the fact that employees in the informal sector don’t benefit from the schemes.

“The formal sector labourers contributes to only 5.4 per cent of the whole labour force in the country of over 16 million people. This means the remaining 15 million labour force are engaged in informal sector and therefore, not covered by the current social security schemes,” Namala said.
SOURCE: THE GUARDIAN

Social security funds faulted over benefits

By The guardian reporter
3rd May 2011

Civic United Front (CUF) national chairman Prof Ibrahim Lipumba has raised concerns over deep-rooted bureaucracy in social security funds, saying they make the members unable to benefit from their own contributions.

The politician, who was giving his views on Sunday on a local TV station on marking the International Workers Day (May Day), said it was difficult for the workers to reclaim their contributions after resigning or retiring from work.

“When one resigns from work, retires or dies, it is extremely difficult for his funds to be obtained from the respective social security fund,” said Lipumba.

He further said that while members of the funds were living in a hard way, those working in the funds were wallowing in luxury.

“It is as if these funds are meant to benefit the few who run the funds and not the workers who contributes to them,” the Prof said.

He said the funds were very important and critical for the social well-being of the world's community.

Lipumba cited benefits workers in Singapore enjoy from their social security funds, saying the members have benefited a lot, with the majority having modern homes, enjoys excellent heath services and are able to fund their children’s education.

He said political interference was the major bottleneck in the efficient functioning of the funds in Tanzania.
SOURCE: THE GUARDIAN

Social security schemes need to rise to occasion

By Editor
7th April 2011

Delegates to a recent meeting of the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) were unanimous that the law ought to provide for the possibility of people seeking membership in pension funds of their choice.

They also appealed to the government to ensure that all such schemes place a premium on efficiency and not failing security and sustainability tests.

That voices were being raised over the importance of streamlining or rationalising the duties and responsibilities of pension funds in the country at a time when concrete measures have already been taken to that effect is, at best, surprising.

Could it really be true that the Social Security Regulatory Authority, which was created by law in 2008 and which President Jakaya Kikwete launched in the third week of last month, was established unbeknownst to agencies such as TCCIA?

Yes, not even a month has passed since SSRA officially took up the task it was set up to undertake – that of regulating the operations of social security and pension funds in the country. However, the period between the enactment of the law under which the agency was established and its official launch on March 23 is long enough for all interested parties to have a rough idea about what the whole thing entails.

Anyway, SSRA is now in business. The much we know is that it is still busy trying to sell itself alongside identifying problems or challenges in its area of operation and generally proving its worth before a public eagerly waiting to see the difference it will make in the state of pension funds and the lives of pension fund members.

Indications are that all six pension or social security funds in the country – National Social Security Fund, Parastatal Pensions Fund, National Health Insurance Fund, Local Authorities Pension Fund, Public Service Pension Fund and Government Employees Pension Fund – are fully briefed on the bearing the advent of SSRA will likely have on their future operations.

Fortunately, most say they hope to have lined themselves up appropriately enough to face the future with enhanced hope by the time the regulatory authority digs in.

In a recent comment, we argued that the easiest way for social security schemes to expand their membership bases is to come up with impeccable evidence that they are institutions of unquestionable integrity whose members are sure to find value comfort and relief in retirement.

We also noted that the schemes’ infrastructural and other investments are implemented largely thanks to members’ contributions and should not be made at the expense of the members.

SSRA will be credited with a job well done if, as it plays its regulatory role, it sweeps the social security sub-sector clean by ending unhealthy inter-scheme competition and creating conditions making it possible for more ordinary Tanzanians to join and benefit from the industry.

We say this because we understand that, so far, social security schemes serve no more than six per cent of Tanzania’s labour force and 3.5 per cent of the country’s population. This is by all accounts sad, and the schemes should feel duty-bound to save the day.
SOURCE: THE GUARDIAN

The new social security institution is a big boost to the welfare of Tanzanians

By Henry Muhanika
3rd April 2011

An important event took place during the last week of this month, only to be overshadowed by more dramatic and sensational ones like new angles of the Loliondo magical healer story, the fatal road accident which claimed the lives of 13 musicians and left several others wounded, the military bombardment of Gaddafi’s Libya by the bully nations of this world, and the dangerous leakage in Japanese nuclear installations, triggered by one of the most deadly earthquakes in many years.

With such events dominating the news in the local and international media, the launch of the National Social Security Regulatory Authority (SSRA) was received a bit casually, the fact that the President himself was a guest of honour at the event notwithstanding.

Since the Act to establish the Authority was passed by the Parliament in 2008, its take off may be said to have come a bit late, given the importance of the institution to the wellbeing of Tanzanians, and the eagerness with which it was awaited by those who appreciate its role in society.

But considering that we live in an environment where so many things seem to be priorities and economic planners have to work overtime on permutations and combinations of how to make maximum use of our limited financial resources, the fact that the Authority is finally here is itself a big relief.

Why do we consider the formation and operation of the Authority to regulate social security and pension activities an important development in our society? A clear picture of what is at stake here can be obtained by examining, albeit briefly, the role and importance of such an institution in the community at this particular moment in history.

It is, after all, not without good reasons that before deciding to have a regulator, our nation had put in place 6 social security related institutions.

These include the National Social Security Fund (NSSF), the Parastatals Pension Fund (PPF), the Local Authorities Pension Fund (LAPF), the Public Service Pension Fund (PSPF), the Government Employees Pension Fund (GEPF) and the National Health Insurance Fund (NHIF).

All the above mentioned institutions have been established by law, collect workers’ contributions, manage the funds, and provide relief money during moments of need like sickness, injury, pregnancy, post retirement period and even when death strikes.

This, in a nutshell, is what social security is about. In order to provide more and substantial benefits to members, social security institutions are expected to invest some of the collected funds in viable economic activities so as to generate profit and expand the capital in the interests of these on board.

Of course some of the fore-mentioned activities are easily said than done by our social security institutions as past experience has, unfortunately, clearly shown. We have had cases where some of the social security and pension institutions have misused, misallocated, and even wrongly invested members’ money, to the point of failing to provide timely benefits to owners while in need, as specified in the contracts between the two parties!

This is where the regulator’s services come in handy. Those conversant with this sector note that giving social security and pension institutions a free hand to manage huge funds without a regulator was a serious administrative oversight which, unfortunately, has unnecessarily taken a long time to see and address promptly. Now that there is a regulator, it is hoped that most of the past mistakes will remain part of history.

But the new regulatory authority still has a bigger mountain to climb. The social security institutions it is supposed to regulate cater for a negligible percentage of the population, that is a few salary earning workers, as not even all those employed in the formal sector are subscribers.

In short, millions of Tanzanians are not embraced in this undeveloped social security system. This is happening at a time when the world is experiencing all sorts of complications, both natural and man-made ones, which have increased social insecurity.

Under these circumstances, the success or failure of the newly launched regulatory outfit will be gauged on how it manages or fails to put in place a social security system which will provide these vital services to the majority of Tanzanians who need them urgently.

Some observers are of the opinion that the proposed new constitution can make the regulator’s work easier if it addresses the issue seriously and give the new institution adequate powers.

Henry Muhanika is a Media Consultant hmuhanika@yahoo.com
SOURCE: GUARDIAN ON SUNDAY

SSRA: Social security funds want their laws amended first

By Joseph Mchekadona
8th March 2011

The Social Security Regulatory Authority (SSRA) has said all the six Social Security Funds in the country have sought request from the regulatory body to continue using their current laws while waiting for amendments to recognise the existence of the new authority.

SSRA chairman Juma Siraju Kaboyonga said this in Dar es Salaam last week at a meeting organised by the authority to share ideas between the authority and the social security funds.

He said SSRA at the meeting proposed that security funds laws must change to create a harmonious climate between them and the authority, but the funds asked for time to amend their laws.

“We had a good meeting with all the six social security funds and we proposed to them that they change the SSRA law, but they asked for more time to start amending theirs,” he said.

Kaboyonga said SSRA agreed that the actual valuation on how the social security funds can operate should be done before the existing ones.

He named the funds that attended as National Social Security Fund (NSSF), Parastatal Pensions Fund (PPF), Government Employees Pension Fund (GEPF), Public Sector Pension Fund (PSPF), Local Authority Pension Fund (LAPF) and National Health Insurance Fund (NHIF)

The meeting between the two organisations was organised amid allegations that some of the funds are investing in unviable projects, lending to non-members and taking overly long to issue members’ benefits.

So far some social security funds have invested in investments which they claim give high returns and also improve the public’s welfare.
SOURCE: THE GUARDIAN

Govt mulls new Bill on free social services for the elderly

By Patrick Kisembo
16th February 2011
Deputy Minister Dr Lucy Nkya

The Ministry of Health and Social Welfare is planning to draft a Bill on free social services for the elderly, Parliament was told yesterday.

Responding to a basic questioned posed by Bukombe Member of Parliament (Chadema), Prof Kulikoyela Kahigi, Deputy Minister Dr Lucy Nkya said the law was in the pipeline.

The MP had wanted to know government plans on supporting the elderly, especially those lacking families or relatives to take care of them.

Nkya said the Bill, among other things, would propose that all elderly the be allowed to access essential social services by using special identity cards.

In the meantime, the deputy minister said the government had already directed all regional medical doctors to create a special window for the elderly and ensure that the windows have a medical doctor and professional social welfare officer.

She also informed the House that the government was implementing a lot of plans in taking care of the elderly, naming some of them, as creating special homes for them and facilitating the private sector to do the same.

Nkya said the government operated a total of 17 homes for the elderly and voluntary agents running similar centres on private basis operates an additional 24 homes are located in different parts of the country.

Additionally, she said the ministry through social welfare department provides human support like money to the elderly and assist them to establish small scale businesses.

Dr Nkya said currently, the government was preparing a social protection framework, which would be looking at basic needs of the needy groups living in difficult environments, including the elderly.

“We are working in collaboration with district, municipal, towns and city councils to ensure needs of the elderly are included in the councils’ development plans,” said the deputy minister.
SOURCE: THE GUARDIAN

SSRA:Fragmented social security laws need to be harmonised

By Joseph Mchekadona
17th February 2011

The newly established Social Security Regulatory Authority (SSRA) has said the country’s laws on pension funds need to be harmonised to enable the pension providers offer better services to clients.

Speaking in Dar es Salaam yesterday, SSRA chairman Juma Siraju Kaboyonga said the laws, in their current state contravenes International Labour Organisation laws.

He said ILO laws require all social security providers in a given country not to have fragmented legal and regulatory framework.

He said six social security providers in Tanzania are under different ministries, the development of which makes them offer different benefit packages.

Explaining, he said, Parastatal Pension Fund (PPF), Public Service Pension Fund (PSPF) and Government Employers Pension Fund (GEPF) are under the Ministry of Finance and Economic Affairs, while National Social Security Fund (NSSF) reports to the Ministry of Labour, Youth and Employment.

He further explained that the Local Authority Pensions Fund (LAPF) and National Health Insurance Found (NHIF) reports to the Prime Minister’s Office—Regional Administration and Local Governments and the Ministry of Health and Social Welfare respectively.

Kaboyonga said workers of same profession were receiving different pension packages because their social security organisations reports to different ministries.

“Two people of the same profession get employment on the same date, but because circumstances may make them to join different social security funds, they end up getting different packages because their respective pension funds report to different ministries,” he noted.

He also mentioned other reasons which affect the funds as having different Investment policies, lack of transferability, unreliable data and lack of segmentation of benefits.

The SSRA chairman mentioned some of the challenges facing social security organisations as high costs of administration, premature withdraws, lack of awareness of the funds’ activities by members of the public and application of different pension factors.

“Social security organisations in the country are facing many challenges which make the industry looks less beneficial to the stakeholders,” he said.

He said his organisation will make sure that interests of social security members are protected, extension of social security coverage is facilitated on non covered areas to include informal groups, studies on the same are initiated and reforms in the social services sector are coordinated.

He also said that his organisation will create a conducive environment for the promotion and development of the social security sector and advise the minister on all policy and operations of the social security sector.

“We will work extra hard to see that all Tanzanians benefit from the funds by among other things, advise the respective ministers correctly on all policies and operations of the social security sector,” he said.

SSRA was established under the Social Security Regulatory Act No. 8 of 2008 and its main objectives are to regulate the social security sector.
SOURCE: THE GUARDIAN

Social security schemes have duty to bail us out

By Editor
31st December 2010

It doesn’t take long searching on the internet for one to come across a January 2003 document attributed to the Ministry of Labour, Youth Development and Sports and reading: ‘The United Republic of Tanzania - The National Social Security Policy’.

Although it is not clear to what extent or depth the document has been updated since it was first drawn up, what it says about the objectives of social security services generally tallies with what social security institutions in existence in the country give as their vision or mission.

Some of the explanation is obvious, such as that social security covers a wide variety of public and private measures meant to provide benefits when individual members are unable to avoid poverty after their income-earning power ceases or is otherwise interrupted.

The document elaborates on the key elements of the social security system in Tanzania, among them non-contributory schemes catering for people with disabilities, elderly people and unsupported parents and children unable to fend for themselves.

There are also mandatory schemes, under which members remit regular contributions through their employers to pension or provident funds, with employers also acting similarly.

However, in a candid admission, the policy says inadequate financing and disjointed institutional arrangements have denied the majority of Tanzanians the benefits offered by social security schemes.

By the time the policy was unveiled, when the country had a population of roundabout 33.5 million, it was reported that 5.4 per cent of the labour force – or 2.7 per cent of the population – was covered by the mandatory formal social security system.

Many saw this as spelling grave danger in that informal, that is, family and community support did not guarantee sustainable social security within different social groups.

The country now boasts of a National Social Security Fund, a Parastatal Pension Fund, a Public Service Pension Fund, a Local Authorities Provident Fund, and a National Health Insurance Fund.

Officially, NSSF covers employees of the private sector and non-pensionable parastatal and government employees, PSPF and NHIF cater for central government employees under pensionable terms, PPF concerns itself with employees of both private and parastatal organisations, and LAPF takes care of local government employees.

In sum, even all these schemes combined do not cover all people to be found in the formal employment sector, one explanation being structural, operational and policy weaknesses inherent in the country’s social security system.

This is precisely why the Social Security Regulatory Authority has formed a task force to make a thorough review of the legal and control frameworks governing the operations of social security schemes at play in the country, whose role is widely acknowledged as crucial and sensitive.

Social security cover is basic human right to be enjoyed by every member of society, the only difference being the degree of its accessibility. If anything, the elderly, people with disabilities and the unemployed need it most.

These are hard economic times, and it’s high time our social security schemes did more to bail the nation out the mess it is in. The naming of the task force is to be applauded, as the fruits of its work are eagerly awaited.
SOURCE: THE GUARDIAN

Regulatory authority for pension schemes on the drawing board

By Daniel Ondigo
19th September 2010

A social security regulatory authority vested with the task of reviewing each pension scheme operating in the country is underway, and according to the treasury, it will enhance workers’ savings apart from protecting them.

The Permanent Secretary in the Ministry of Finance and Economic Affairs, Ramadhani Kijjah, says the government has started working on the guidelines for the operations of the authority that will streamline the present schemes, to make them more efficient, and enable members to be the main beneficiaries.

Kijjah made the revelations during the annual members’ conference of the Parastatal Pension Fund here, where he also said that already draft guidelines for the regulator were prepared by stakeholders within and outside the country.

The law that establishes an independent regulator of social security schemes was enacted in 2008 and the regulator will help pension funds to operate more efficiently and ensure their members are the main beneficiaries of respective schemes.

According to the permanent secretary, once the social security regulator gets in place, the number of employees joining pension schemes is expected to swell, especially now as the country opens its doors for the East Africa Common Market.

Solutions to long-term challenges facing pension schemes in the country, including continued fall in the interest rate in the money market, delay in contribution remittances from some employers, early withdrawal of benefits by members when changing employment and HIV/Aids pandemic, can easily be reached when stakeholders are under one umbrella.

He said the government will continue taking legal action against employers who delay remittance of employees’ contributions to ensure timely processing and settlement of members’ claims upon leaving their jobs.

“We see this as a positive move as the new law will require managers and custodians to invest pensions according to laid down criteria while the Bank of Tanzania will, in collaboration with the authority, issue the investment guidelines,” said Khijja, adding that the central bank will have powers to regulate and supervise the schemes' finances and ensure compliance to the guidelines by the managers and custodians.

Presenting the performance report for the year 2009 on behalf of the board of trustees of PPF, William Erio, the PPF Director General, said the fund had registered real GDP growth rate of 6.0 per cent against 7.4 per cent brought in record in 2008, attributing the decline to the global fiscal crisis experienced towards the end of 2008 which had an impact on hey sectors including agriculture, mining, tourism, horticulture and manufacturing which contributes significantly to the economic growth and employ hundreds of PPF members.

During the year 2009, he said the interest rate continued to be influenced by the treasury bills and bond market. The overall weighted average rate on time deposit decreased slightly from 6.63 per cent in December 2008 to 6.36 per cent in December 2009, while 12 month time deposit rate increased from 8.48 per cent in December 2008 to 8.99 per cent in December 2009.

The funds currently operating in the country are National Social Security Fund (NSSF), Parastatal Pension Fund (PPF), Government Employees Pension Fund (GEPF), Public Sector Pension Fund (PSPF) and Local Authority Pension Fund (LAPF).

Meanwhile, Tanganyika Plantation Company (TPC) and Moshi University College of Co-operative and Business Studies (MUCCOBS), both in Moshi Municipality, Kilimanjaro Region, emerged top for timely submission of their workers’ contributions to the Parastatal Pension Fund.

The two parastatals were awarded trophies and certification of participation at the conference.

Reading the scores before PPF board of directors, members, invited guest from various countries, the PPF Deputy Chairman, Dr Kassim Kapalata said the two parastatals shined in both Agriculture and Education and training categories respectively, followed by Uniliver Tanzania Limited and Sokoine University of Agriculture under the respective group.

Other categories that were mentioned during the occasion that attracted hundreds of participants from government and parastatals were from mining, transport and communication, finance, health and construction, while others were derived from Trade and Industry, Media and other services.

Under the mining category, Geita Gold Mine was awarded for leading in timely submission of its workers’ pension contribution, followed by Kahama Mining cooperation and Barick North Mara mining company. The mining parastatals were also awarded with both certificate of participation and trophies.

Other parastatals according to Kapalata, included Tanzania Electric Supply Company Limited (TANESCO) and Tanzania Telecommunication Company Limited (transport and communication), Bank of Tanzania and National Bank of Commerce (finance sector) and Muhimbili National Hospital Africa Medical Research Foundation (Amref) - Health sector.

The construction sector was lead by Tanga Cement Company followed by Mbeya Cement Company while trade and industry was lead by Tanzania Breweries Limited, Tanzania Tobacco Processors Limited.

Tanzania Standard (Newspapers) Limited emerged the best in media sector, followed by Tanzania Broadcasting Corporation (TBC) and Aboud Media while under other services; Ultimate Security Limited and KK security Limited were short-listed as among the winning parastatals.

Self-employed locals whose contributions were acknowledged included Elias Samuel, a foreign investor working with the Philips electronics and a local investor, Philip Ndinda.

Giving his vote of thanks on behalf of other PPF clients, Kelvin Felix commended the PPF management team for the motivating awards, urging other pension organizations to borrow a leaf.

Through the annual conferences held by the PPF, Felix said the relationship between PPF and its clients has remained intact, adding that more education on financial management to the retirees is needed if they have to use their pension profitably.
SOURCE: GUARDIAN ON SUNDAY

EC advocates improved security for relief workers

By The guardian reporter
20th August 2010

Over 100 humanitarian workers were killed and many more were injured in various incidents worldwide last year, the European Commission (EC) said in a statement yesterday.

In the statement, which was issued to mark the World’s Humanitarian Day, the EC called for improved security of relief workers and respect of humanitarian principles, saying that it honoured humanitarian workers who have lost their lives or freedom, or have been injured while executing their duties.

Quoting the UN Office for the Co-ordination of Humanitarian Affairs' (OCHA) latest statistics, the EC also informed that 92 workers were also kidnapped.

It said the Commission, through its Humanitarian Aid department (ECHO), has staff permanently present in crisis spots around the world.

Kristalina Georgieva, European Commissioner for International Cooperation charged with Humanitarian Aid and Crisis Response, said: "World Humanitarian Day gives us the opportunity to reflect on the importance of humanitarian work in saving lives and providing for people in need wherever they may be.”

She said relief workers serve humanity, often in very perilous circumstances. “We have seen them extending help to victims of earthquakes fires and floods. But it is in conflict zones where their lives are most at risk,” said Georgieva, adding:

“There is an alarming trend to target these dedicated people. We must protect the safety of humanitarian workers so they can work wherever they are needed.

To do this, I will continue to raise awareness of the worsening security conditions for those who put their lives at risk to save the lives of others.”

The EC commissioner said it’s paramount that the core principles of humanitarian aid: humanity, impartiality, neutrality and independence are understood and respected.

“We must stop the shooting of humanitarian workers -- when they are hurt, so is the hope in the future of our children,” she said.

The World Humanitarian Day was established by the General Assembly of the United Nations in 2008 and commemorated for the first time last year to increase public awareness about humanitarian work and the importance of international cooperation.

SOURCE: THE GUARDIAN

Even informal sector needs social security

By Editor
28th May 2010

While almost half the over 40 million Tanzanians are employed in the formal sector, most of the rest eke out a living in the informal sector, including agriculture, construction, big and small business and other income generating activities.

Unfortunately, people engaged in the informal sector operate in an atmosphere that is far from conducive right from the point that it is a nightmare for most to secure loans given the stringent conditions set by banks and other financial institutions.

They are therefore forced to toil especially hard, supported by very meagre resources, with many stumbling and falling along the way. Those who make it often spend sleepless nights struggling but earning little.

As they grow older, they again find themselves victims of another serious anomaly: a social security system that caters only for workers in the formal sector, leaving those in the informal sector to fend for themselves.

Finance and Economic Affairs minister Mustafa Mkulo, CEO of the mighty National Social Security Fund (NSSF) before he retired ten years ago, says it is appalling that less than a million Tanzanians have access to a formal social security fund.

He made the remarks in talks with workers of the Government Employees Provident Fund (GEPF) early this week, saying this was wrong, unacceptable and must be addressed to ensure that the majority of the people access social security funding.

We believe that this is the time to act. Social security funds fall under the docket of the Treasury, now headed by a man with immense experience in social security matters.

What should be underlined here is that without social security, most Tanzanians now excluded will continue to be most vulnerable to poverty and economic insecurity.

There are six social security institutions on the Mainland and one in Zanzibar, and we believe all that is required is political will and firm resolve by the government to ensure that security funds change the rules of the game and move away from covering only a fortunate few and instead reach all Tanzanians.

It needs a change in mindset. This is because of the fondness by many funds of establishing insurance schemes suited only to people with regular remuneration where such people work for an employer with a system of financing which included employer contribution.

Change is crucial especially in Tanzania where statistics show that one person who earns regular income can have as many as five dependants, some of them elderly people without any social security cover.

We understand the GEPF has been working on a new pension scheme that seeks to accommodate workers in the informal sector. The move is reportedly designed to wean the fund off near-total dependency on people engaged by the government on contractual basis and would shift from GEPF to the Public Sector Pension Fund (PSPF) when they graduate into permanent government employees.

While we congratulate GEPF for the move, we wish to urge the Treasury and social security institutions to act fast and correct this anomaly. To the extent that these institutions are public, they are duty bound to stand as such.

SOURCE: THE GUARDIAN

Social security body for Mwanza meeting

By The guardian reporter
26th January 2010

The East and Central Africa Social Security Association (ECASSA) is set to hold a second meeting in Mwanza Region by the end of this month.

A statement issued yesterday in Dar es Salaam said the meeting is to discuss pertinent issues on leadership and social security governance in Tanzania.

The meeting would bring together various stakeholders and social security policymakers to discuss and find solutions to issues and challenges that the sector faces.

The meeting is expected to gather 150 participants from eight countries and 45 institutes.

“Ministers responsible for social security from member countries, permanent secretaries and board members from social security institutions, chief executives and senior officers are expected to participate,” it said.

It said the theme of the meeting is “social security governance”, adding that some of the agenda items to be discussed include issues of leadership and social security governance, portability of benefits, microeconomic impact of social security and social protection floor.

The first meeting was held in Mombasa, Kenya in November 2008 which decided on the importance of having a department to deal with social security matters in the East African community, social security leadership and expansion of social security issues.

ECASSA was established in Kigali, Rwanda, on March 31, 2007 after 15 heads of social security institutions signed an agreement to establish the association.

SOURCE: THE GUARDIAN

Mkullo: Government to appoint Social Security Funds watchdog CEO soon

By The guardian reporter
5th January 2010
Minister of Finance and Economics Affairs, Mustafa Mkulo

The appointment of the Chief Executive Officer (CEO) for Tanzania’s Social Security Regulatory Authority (SSRA) is to be announced anytime from now, the Minister of Finance and Economics Affairs, Mustafa Mkulo told The Guardian yesterday.

The finance minister was not sure, however if the proposed name for appointment had been sent to State House for approval.

He clarified that his role in the soon to be established SSRA will be 40 per cent with the role of the Minister for Labor and Youth development taking the lead role of 60 per cent.

The proposed name of the appointee in this arrangement is supposed to be sent to State House by the Minister for Labour and Youth Development, Prof Juma Kapuya.

Minister Kapuya hung up his phone when contacted to talk about the appointment yesterday. The International Monetary Fund (IMF) has advised Tanzania to speed up formation of the Social Security Regulatory Authority to enhance growth of the industry and curb misuse of workers' savings, the local media reported yesterday.

In its response to a letter of intent by the Minister of Finance and Economic Affairs, Mr Mustafa Mkulo, the IMF said SSRA was crucial in regulating pensions and other related services.

"Beyond the banking system, continued absence of social security regulator remains a significant weakness in the economy," reads part of the IMF's statement.

IMF said although Tanzania's financial system has not been directly affected by the global crisis, supervision should remain vigilant and gaps in the framework plugged.

Minister Mkulo said in his letter of intent to IMF in November, last year that investment guidelines for the pension funds, incorporating views from stakeholders, had been drafted and would soon become operational.

"A budget allocation for the pension regulator has been provided and new actuarial reviews of each of the pension funds are underway," he said.

The Minister for Labour, Employment and Youth Development, Prof Juma Kapuya, told the 'Daily News' recently that the recruitment of the management of regulator was still on, but was not sure as to when the chief executive would be picked.

"We have finished recruitment of some workers in some levels, but the decision on the chief executive is beyond my jurisdiction," he noted.

The law establishing an independent regulator of social security schemes was enacted in 2008.

The regulator will help pension funds to operate more efficiently and ensure their members are the main beneficiaries of respective schemes.

The government expects that the number of employees joining the social security schemes will increase, when their operations are regulated.

The Controller and Auditor General (CAG) has often in his annual reports criticised some pension funds for mismanaging public funds.

SOURCE: THE GUARDIAN

LAPF best social security fund for 2008By Adam Ihucha 15th December 2009 Email Print Comments The National Board of Accounts and Auditors (NBAA) has named the Local Authorities Pension Fund (LAPF) as the best social security fund in terms of well audited accounts in 2008. "LAPF emerged the best in terms of presenting well audited financial statement for 2008, outsmarting several others in the social security funds category," NBAA Governing Board Chairman Dr Mussa Assad said at the award giving gala organised alongside the Annual Accountants Conference in Arusha at the weekend. Dr. Assad said the LAPF financial statement of the year was done in accordance with international financial reporting standards. Finance and Economic Affairs deputy minister Jeremiah Sumari handed over the prize to LAPF Director General Eliud Sanga during the colorful ceremony. Government Employees Provident Fund (GEPF) and National Health Insurance Fund (NHIF) ranked second and third respectively, within the same category. “NBAA Best Presented Accounts Award 2008 is not only an award for finance departments alone, but also an honour for the entire LAPF institution,” said LAPF Director for Finance John Kida, shortly after the event. Kida added that the award was not only an indicator of improvement of performance and financial security reporting, but also portrayed the LAPF management’s accountability. “We are managing colossal amounts of money of our members so the best financial statement for the year 2008 is the best method of understanding the financial health of LAPF and how its workers are accountable,” Kida said. LAPF was established in 1944 and was mandated to create a single fund for all local authorities’ employees in the then colonial Tanganyika. In 1972 Town and District Councils were abolished and the fund became dormant. It was revived in the 1986/1987 financial year, under Section 16 of the Local Government Service Commission Act, Number 10 of 1982, following the re-establishment of Town and District Councils in 1982. In 2006 it was converted from a provident to a pension fund through the enactment of the Local Authorities Pension Fund Act Number 9 of 2006, passed by Parliament in November 2006. Before LAPF was revived it operated under the Local Authorities Provident Fund Act no. 6, of 2000. SOURCE: THE GUARDIAN 0 Comments | Be the first to comment More News Articles Rwanda happy with efforts to curb fuel adulteration Tanzania permitted to mine uranium in Selous Govt starts enforcing law on spectacle sales Moi, Mwinyi press for enhanced EAC integration Lawmaker wants new media policy publicised Minister quizzed in Parliament on Deci Isles govt urged to buy local office furniture Govt to form board on domestic workers` conditions Alerts | Contact us | Lokopromo ippmedia.com © 1998-2010. All rights reserved

By Adam Ihucha
15th December 2009

The National Board of Accounts and Auditors (NBAA) has named the Local Authorities Pension Fund (LAPF) as the best social security fund in terms of well audited accounts in 2008.

"LAPF emerged the best in terms of presenting well audited financial statement for 2008, outsmarting several others in the social security funds category," NBAA Governing Board Chairman Dr Mussa Assad said at the award giving gala organised alongside the Annual Accountants Conference in Arusha at the weekend.

Dr. Assad said the LAPF financial statement of the year was done in accordance with international financial reporting standards.

Finance and Economic Affairs deputy minister Jeremiah Sumari handed over the prize to LAPF Director General Eliud Sanga during the colorful ceremony.

Government Employees Provident Fund (GEPF) and National Health Insurance Fund (NHIF) ranked second and third respectively, within the same category.

“NBAA Best Presented Accounts Award 2008 is not only an award for finance departments alone, but also an honour for the entire LAPF institution,” said LAPF Director for Finance John Kida, shortly after the event.

Kida added that the award was not only an indicator of improvement of performance and financial security reporting, but also portrayed the LAPF management’s accountability.

“We are managing colossal amounts of money of our members so the best financial statement for the year 2008 is the best method of understanding the financial health of LAPF and how its workers are accountable,” Kida said.

LAPF was established in 1944 and was mandated to create a single fund for all local authorities’ employees in the then colonial Tanganyika.

In 1972 Town and District Councils were abolished and the fund became dormant. It was revived in the 1986/1987 financial year, under Section 16 of the Local Government Service Commission Act, Number 10 of 1982, following the re-establishment of Town and District Councils in 1982.

In 2006 it was converted from a provident to a pension fund through the enactment of the Local Authorities Pension Fund Act Number 9 of 2006, passed by Parliament in November 2006. Before LAPF was revived it operated under the Local Authorities Provident Fund Act no. 6, of 2000.

SOURCE: THE GUARDIAN

Two sides of social security fund coin

By Mbena Mwanatongoni
30th August 2009
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The story of a humble peasant in Arusha Region’s Karatu District is replicated somewhat by the agonising experience of many members of the National Social Security Fund (NSSF).

The long deceased peasant, whose story is recounted through a son who wishes to remain anonymous, surrendered much of his earnings from the sale of wheat to a wealthy farmer for safe custody.

He withdrew small sums periodically from the informal banker – a close friend --who, on the surface, was trustworthy because proper records were kept and the informal client didn’t lose a single cent.

Beneath the surface, however, the “banker” who didn’t charge his informal client any service charges, was profiting from the latter’s savings, which he re-invested in his farming business.

The son, now in his late 50s, explains sorrowfully: “Our father’s friend had been wealthy, alright, but our father’s savings made him wealthier and faster, through re-investment in his wheat farms.”

He says his late father, who had not had the benefit of advanced schooling and exposure to commercial tricks, had no idea that if he had invested money that he had entrusted to his friend into his own farms, he would have elevated his economic fortunes considerably.

The son lamented that by the time the children had become sufficiently grown-up, they discovered the trickery and sounded off their father, he had already been on the verge of retirement.

“He ceased to use the friend as a banker, but there was no legal basis on which he could press him for interest on the savings that boosted his economic fortunes,” he lamented further.

Nearly 500,000 private sector employees contribute to the NSSF, which was established by an Act of Parliament in 1997 to replace the National Provident Fund (NPF).

Unlike the Karatu peasant whose association with his friend was based purely on mutual trust, an NSSF member is protected by legal provisions under which one’s savings are protected, and an employer tops up a percentage of one’s contributions slashed from monthly salaries.

The contributor, furthermore, enjoys some interest and a number of statutory long-term pension benefits upon retirement, invalidity or death, allowing the member’s survivors to enjoy the contributions.

There are also short-term benefits for the fund’s members in the form of funeral grants, benefits for maternity, employment injury or occupational diseases and health insurance.

But while some members appreciate the Fund’s benefits, they feel they are latter-day versions of the Karatu peasant, and want adjustments made to make them more beneficial clients of NSSF.

They are proposing that the Parliamentary Act should be amended to incorporate a clause that allows them to borrow from their contributions in order to solve pressing financial problems.

A middle-aged man who identified himself by one name, Yakubu, said he is often tempted to retire prematurely in order to reap benefits from his current NSSF contributions, rather than await presumably bigger benefits when he clocks 60 years.

Under the current arrangement, a member who attains that age and has made contributions for an unbroken chain of 15 years (a total of 160 months) gets a lump-sum, plus a monthly pension until he/she dies.

He recounts that two years ago, he bought a two-acre piece of land at Kifuru village in Dar es Salaam Region’s Kinondoni District for a total of Sh700,000 – at the rate of Sh350,000 each.

The man who lives at the Tabata suburb, explains that during regular visits to Kifuru, he has established that the value of land there has shot to Sh2,500,000 per acre, meaning that his farm is now worth Sh5million.

“If I had wanted to buy the piece of land now, I wouldn’t easily raise it through savings from my modest salary. As a last resort, I would take a Sh5million bank loan whose repayment figure could be as high as Sh7million.”

He poses and proceeds: “If I were allowed to withdraw the amount from my NSSF savings currently standing at Sh15million, I would be much happier because I would be spared the indignity of being a debtor and incurring a loss in the form of high bank interest rates.”

He then engages in a bit of arithmetical speculation: “If I cease to be an NSSF member today and invest Sh10million in land at Kifuru or elsewhere, and given the hot cake nature of the property, I most probably would resell it for something like Sh30million in two-to-three years’ time.”

While expressing sympathy for the members’ concerns, the Fund’s authorities say that the corporate organisation could collapse within a short period if it engaged in the business of extending loans to the members, or letting them withdraw parts of their savings.

The alternative, they say, would be for NSSF to plunge itself into the banking industry, which would, among other conditions, entail charging commercial interest rates.

The NSSF Director of Operations, Crescentius Magori, said in an interview: “Once we get involved in banking operations, we cannot avoid commercial interest rates in order for the Fund to survive.

Otherwise, we will be insolvent and consequently unable to pay security benefits to our members.”

According to Magori, there are around 1,600 employers, with whom it is impracticable to meet as one group at once.

He explained, however, that plans are afoot to conduct zonal meetings at which smaller groups of members would meet and discuss issues of interest.

There is also the question of compromise on some of the members who might secure such loans as it is feared that once the loans are misused, they will suffer most when they are not in employment as they would not have much money in their accounts to look after their security.

The Director of Planning, Investments and Policy of NSSF, Yakub Kitula, echoed Magori’s position on the question of extending loans to the Fund’s members, stressing that in order to ensure that the organisation is always solvent, and thus being able at any given time to settle the benefits of its members, it has to invest in sustainable economic projects instead.

Kidula said: “Keeping members’ money without reinvesting it in sustaining projects will likely leave the Fund ending up without the money to serve our members,” adding that companies or corporations can borrow from the Fund because they are required to pay with commercial interest rates.

The prospect of loaning the money to members will dry the organisation of the needy cash when needed by its members, and according to the law, the relation between the organisation and the member is clear: the member’s contributions are kept safely by the Fund which will in turn disburse the benefits accordingly.

NSSF is a compulsory scheme which covers all employees in the private sector, including non-governmental organisations and other groups in the informal sector.

These are embassies based in Tanzania employing Tanzanians, associations and organised groups in the informal sector, government and parastatal employees who are on operational services and temporary employees.

“A member who has just retired from employment but does not meet the qualifying conditions for monthly pension benefits will be entitled to a special lump-sum payment. This will be calculated on the basis of an insured person's monthly contribution at the time the lump-sum becomes payable times the number of months of contribution (contribution credits),” so says the NSSF policy.

But 57-year-old Hamisi Chikawe and 65-year-old Valerian Paul, retired members of the NSSF for about 20 years, both putting up residence at Kibaha Mailimoja Shuleni, want the Fund shaped anew, so that its members, as critical and most important shareholders, should enjoy the accrued benefits from the organisation’s investments.

“I have already been paid my dues, which, in the first place, I suspect were not up to the market value. But fresh consideration of this issue, I believe, is of paramount importance as it is the members’ money that is invested in the projects that are highly paying, though not reflected in the final members’ benefits,” remarked Chikawe.

Paul echoes the sentiments, uncertain on whether the Fund’s projects eventually lift the lives of the people employed by social security body.

Paul adds: “You may not need more proof other than casting a glance at their lifestyles.

The Fund’s objectives are very good, but for the sake of fairness, those managing the institution and the members who pump money into it should share the proceeds accrued from the investments more-or-less equitably.”

SOURCE: GUARDIAN ON SUNDAY

Employers advised to beef up staff contributions to social security funds

By Nasser Kigwangallah
31st March 2009
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Assistant Labour Commissioner for Social Security David Kaali has called on employers in the country to increase their workers` contributions to social security funds to enable them reap handsome benefits in their retirement.

Kaali made the call at a one-day stakeholders` meeting to discuss social security draft regulations for 2009 in Dar es Salaam on Friday.

The meeting was organized by the Ministry of Labour, Employment and Youth Development and attended by social security funds including the Parastatal Pensions Fund, (PPF), National Social Security Fund (NSSF), Public Service Provident Fund (PSPF), Local Authorities Provident Fund (LAPF), National Health Insurance Fund (NHIF) and Government Employees Provident Fund (GEPF).

Others who attended came from the Prime Minister’s Office (Regional Administration and Local Government), Trade Union Confederation of Tanzania (TUCTA), Association of Tanzania Employers (ATE) and the Ministry of Health and Social Welfare.

The meeting aimed at discussing and reaching a consensus on the draft regulations before they were implemented.

He said the regulations were a follow-up to the passing of the Social Security Authority Act which became law on June 6, 2008.

“Implementation of the Act has started by preparing the draft Social Security Regulations which stakeholders got the chance to discuss,” he said.

University of Dar es Salaam don Prof Josephat Kanywanyi said appointment of people to run the new Social Security Regulatory Authority should be those who are honest and of integrity.

“Corrupt officials with questionable integrity should not be appointed at all to run the schemes which are responsible for safeguarding millions of shillings of members' contributions,” he warned.

He added that employees should use these schemes to contribute their money so that, in their retirement, they should be able to benefit immensely.
SOURCE: THE GUARDIAN

Social security covers only five per cent of workforce - Mkulo

4th May 2009
 
Minister for Finance and Economic Affairs, Mustapha Mkulo.

The government has challenged social security funds and their stakeholders to broaden their membership size coupled with down to earth improvement and efficiency.
Minister for Finance and Economic Affairs, Mustapha Mkulo made the appeal over the weekend in Dar es Salaam at a one-day first annual general meeting of Government Employees Provident Fund (GEPF).
He said presently only five percent of the 20million active and productive Tanzanians contributed to the social security sector.
"As of now, only about 5.0 percent of just 20million people who were capable to contribute and did so practically were members" adding such a number was too small representing only those on formal employment.
He said the majority in the informal sector was not covered under the social security fund a situation that needed timely redress through concerted efforts involving all stakeholders.
As for the GEPF and other social security funds in the country the minister counselled them to involve major stakeholders including retirees to discuss how the funds could be improved for wider coverage of membership in the country.
Minister Mkulo also said plans were under way to establish a regulatory and coordinating organization for the country's social security sector with a view to improving effectiveness and provision of quality services.
He said establishment of the the body would pave the way to more service improvements resulting in among other heartening outcomes such as broadening members coverage and funds contribution.
"We appeal and would like each and every Tanzanian to bank on and realize the worthiness of the funds" said the minister.
On her part, the GEPF Board of Trustees Chairperson, Monica Mwamunyange underlined the importance of social security funds and appealed to members to make timely contributions to the funds noting further that they were for all workers.
She said GEPF in the 2009/2010 financial would introduce a new product involving all workers in the country.
As of now she said contributions had increased from 3.8bn/= in 2004 to 10.40bn/= in June last year with four consective years of exemplay performance..
SOURCE: THE GUARDIAN