Minister: We`ll increase pension depending on availability of funds

By Correspondent

20th July 2012

The Government has acknowledged that the use of sub-treasuries to coordinate pension services has helped to easy the process, Deputy Minister for Finance Saada Mkuya, told the House in Dodoma on Wednesday when responding to a basic question posed by Salome Mwambu (Iramba East, CCM).

Mwambu had wanted to know how the government intended to simplify the process for retirees to receive their pensions, also, why there were differences in pension payments to retirees and whether there were any plans to increase the amount paid.

“The government recognises that the rate of pension paid to retirees currently does not satisfy their needs and that is why it has been adjusting the payment whenever the budget allows: July 2009 pension pays were adjusted from 21,601/- to 50,114/- per month,” explained Mkuya.

“The government foresees its ability to afford the minimum pension increase and if capacity growth becomes sustainable, it will not hesitate to increase the pension again…,” she assured the House.

She stressed that the only difference between the government social security package and other social funds such as the National Social Security Fund (NSSF) and Parastatal Pension Fund (PPF) is in the methods adopted to calculate the pension funds, she said. However, she did not specify the different methods or formula.

Social Security Regulatory Authority (SSRA) in cooperation with the Bank of Tanzania (BoT), is evaluating means to ensure that social security funds use one formula to calculate retiree pensions without affecting the development of the fund.

“The result of the evaluation will be handed in to pension stakeholders today for discussions and recommendations ahead of sending it to the minister’s committee for an agreement…,” she declared.

In reaction to the basic question posed by Muhammad Ibrahim Sanya (Mji Mkongwe, CUF) the deputy minister assured Tanzanians that their government recognises the difficult conditions TPDF retirees are facing and as a result it will continue to increase the level of pension dependant on fund availability.

Sanya had wanted the government’s explanation on the fate of Tanzania People’s Defence Forces’ retirees living under very difficult conditions due to, among other things, rocketing inflation while pension levels remain grounded.

Pensions are payments generated by contributions of both retirees and their employers, the procedure does not provide an opportunity for retiree to increase their pensions when, for example, low levels of salaries is increased.

SOURCE: THE GUARDIAN