HakiPensheni

Task force reviews social security schemes

By Felix Andrew

30th December 2010

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  To harmonise regulations, widen coverage

The Social Security Regulatory Authority (SSRA) has formed a task force to review the legal and control frameworks governing operations of the schemes in the country.

The authority’s Director General, Irene Isaka said members of the task force are from the Attorney General’s Chamber, the Ministry of Finance and Economic Affairs, Bank of Tanzania, social security experts from the International Labour Organisation and the Ministry of Labour and Employment.

She said the team was tasked with drawing up the regulations and guidelines for the harmonisation of legal and regulatory framework will start during the first quarter of next year.

“We expect a lot from the task force, considering the sensitivity of the social security sector,” she told a news conference yesterday in Dar es Salaam.

Isaka said social security stakeholders should wait for the regulations and guidelines on transferability which will be issued after actuarial valuation of all the funds.

“We expect to conduct public awareness programmes to the stakeholders of social security schemes before issuance of the regulations and guidelines,” said the SSRA head.

She said the authority will establish a research department with a robust database and in-house actuary to facilitate development of social security products.

On challenges, she said the social security sector faced a lot of impediments which require cooperation from the stakeholders.

Some of the challenges include, fragmented legal and regulatory framework where the funds report to different ministries.

Other challenges are the lack of a mechanism for transferability, lack of indexation, little awareness by the public of social security schemes, poor social security infrastructure, and high cost of administration and lack of segmentation of benefits.

She said the main challenge was the little coverage of Tanzanians by the schemes compared with other East African countries.

At the moment, only 3.5 percent of Tanzanians are covered by the funds, while coverage in Kenya is at 8 percent and Uganda 11 percent.

“We want to increase the number through various ways next year, after the task force presents its report,” she said.

Isaka said a well designed social security system should be broad- based with adequate coverage in terms of membership and risks.

The system should be affordable by individuals, business and at macroeconomic levels, actuarially sound and sustainable for over 70 years.

She assured Tanzanians that the regulator will make sure schemes remains secure and sustainable, members’ interests are protected, coverage is increased and funds are invested according to rules or investment guidelines.

SSRA which would start recruiting senior staff in February next year was established under the social security regulatory authority Act no 8 of 2008 with the main objective of regulating the social security sector and related affairs.

SOURCE: THE GUARDIAN