HakiPensheni

SSRA: We`re reviewing social security schemes

By The guardian reporter

27th September 2011

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The Social Security Regulatory Authority (SSRA) and the Bank of Tanzania are undertaking a comprehensive actuarial valuation and harmonisation of all social security schemes in Tanzania in a bid to improve members’ benefits.

This was revealed recently in Arusha by Irene Isaka who is the SSRA Director General, during the fourth annual general meeting organised by the Trade Union Congress of Tanzania (TUCTA).

She revealeld that the legal and regulatory framework of the schemes was also being harmonised through amendments to the respective pieces of legislation and that the assignment was at an advanced stage.

“One cannot harmonise the functions of the Funds or the benefits on offer without first amending the laws under which those institutions were established,” she said, adding: “The Ministry of Labour and Employment is preparing a cabinet paper after conducting series of consultative meetings with stakeholders," she said.

In her presentation on the role and responsibilities of SSRA, Isaka said the valuation exercise would help the authority to come up with a harmonised benefits structure including a pension formula, which aims at improving member’s benefits and increasing sustainability of Social Security Schemes.

“Here we are looking at how best we can enhance members’ benefits without compromising the financial stability of the sector and sustainability of the Social Security Schemes,” she said.

She said the first stage would be to analyse the status of each of the Funds. “We expect to come up with six reports, one for each scheme and a comprehensive report for the Sector,” she said, adding that this would be followed by establishing new parameters, including enhanced formula, minimum pension, uniform contribution period, introduction of capping of salaries.

The new parameters which aim at improving benefits of the members would be tested against the investment portfolio of the Funds to see whether they would be able to pay benefits under the new structure, she said.

The DG also informed the participants that SSRA in collaboration with BoT is undertaking a comprehensive portfolio review by looking at four critical areas which include analysis of investment policy of each Fund, investment process, portfolio allocation and yield of each portfolio benchmarked against the actual yield of the same instruments in the market.

“We expect that results of the review will enable the Regulator to prepare and disseminate uniform investment guidelines to all Social Security Schemes in as per the SSR Act,” she said.

It is expected that the analysis will help the government determine the best way of introducing new investment avenues in the market. It is envisaged that the guidelines should be operational by early next year.

Currently Tanzania has five social security schemes namely, National Social Security Fund (NSSF), Parastatal Pensions Fund (PPF), Local Authorities Pensions Fund (LAPF), Government Employee Provident Fund (GEPF) and Public Service Pensions Fund (PSPF)

On indexation of members’ benefits, Ms Isaka said this would be determined by the actuarial valuation, cautioning however that if not properly handled, indexation can easily kill the Fund. “We want to make sure that the Fund is healthy to avoid setting indexation on ad hoc basis as this may frustrate pensioners,” she noted.

On lack of public awareness on social security issues, the DG said the authority is developing a communication strategy and plans to launch social security campaigns in November this year.

Isaka admitted that there were problems with transferability of contributions from one Fund to another, citing workers employed by the Central Government and then transferred to Local Government, and vice versa.

“The Authority is undertaking a study to establish the actual number of people affected. We expect our investigation teams to start this exercise by end of this month and hope that all concerned will accord them maximum cooperation,” she said.

SOURCE: THE GUARDIAN