HakiPensheni

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

By Henry Muhanika

3rd April 2011

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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