Changes to social security law hailed
17th April 2012
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Members: If properly effected, it will boost services, benefits
Minister for Labour and Employment Gaudencia Kabaka
Under the previous set up each social
security fund was formed under its own law, reported to a different
authority and used different formula to calculate benefits for its
members.
Members interviewed by The Guardian said
the measures would go a long way in improving the way the funds served
members and their sustainability.
“We are happy that there will be freedom
for members to choose the fund they wanted to join,” said Hamad Said of
Temeke, pointing out that it was also a wake-up call for funds offering
members poor services.
Siegfrid Kalau of a firm in Dar’s IT
sector said he hoped the Social Security Regulatory Authority would
strictly ensure that members’ funds are invested wisely.
Before the amendments the Parastatal
Pension Fund (PPF), Public Service Pension Fund (PSPF) and Government
Employees Pension Fund (GEPF) reported to the ministry of Finance, while
the National Social Security Fund (NSSF) was under the Ministry of
Labour and Employment and the Local Authorities Pensions Fund (LAPF)
came under the Prime Minister’s Office (Regional Administration).
The National Hospital Insurance Fund (NHIF) reported to the ministry of Health and Social Welfare.
The amendments presented to the House by
the Minister for Labour and Employment Gaudencia Kabaka Social Security
Funds besides harmonising the benefits calculations formulae, also
requires that it take into account the entire service period of a
member, life span after retirement, the pension value compared to the
avalanche of value for money and inflation, as well as service
integration for members who had worked in different places.
Social Security Regulatory Authority act
no.8 of year 2008, section 30 requires all employers to give new
employees the opportunity to join a social security fund of their
choice.
The amendments also open the door for
competition in membership registration, with the criteria for all Social
Security Funds being good service delivery and additional products from
those stated by ILO Convention 102.
Minister Kabaka said the more than 150
amendments aimed to change Social Security Funds laws, Authority law,
and Insurance law and include missing provisions to improve social
security services, benefits, reduce operating costs, provide guidelines,
including investment guidelines.
She said many members had complained of not benefiting from investments made by Social Security Funds.
She said the government through the Social
Security Regulatory Authority aimed to ensure sustainability of the
funds, protect interest of members, increase coverage and reduce the
burden to the Government. The amendments empower Authority to set
benefit calculation formulae, issue regulations, conduct actuarial
valuation, conduct compliance and other function as stated in the SSRA
act section 5 with exception of policy issues.
It was also the government vision that eventually every Tanzanian would become a member of social security funds.
She said the amendments also entailed
changing names of some Funds to enable them to register members in the
market both from formal and informal sectors. Currently only 3.5 percent
of all Tanzanians are members of Social Security Funds and only 6.5
percent of the work force are members of schemes.
Number of board members both for the
Authority and the Social Security Funds has been reviewed and clearly
stated that it will range between 7-9 depending on the size of the Fund,
also enabling good representation of employers, employees, governments
and professionals.
Social Security Funds Investments will be
guided by investment guidelines to be issued by Authority in
collaboration with the central bank.
According to new changes any employer with
foreign employees will have to remit all employees’ contributions to
the Social Security Funds, regardless to their nationality as this will
increase coverage, membership and size of the fund.
SOURCE:
THE GUARDIAN
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