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
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