Security funds gauge 1.3m members

Tuesday, 24 January 2012 21:52

By The Citizen Reporter Dar es Salaam. Despite challenges facing the sector, social security funds’ net assets have grown by 15.6 per cent reaching Sh3.4 trillion, the Social Security Regulatory authority has said. According to SSRA director general Irene Isaka the 15.6 per cent growth, as shown in the 2010 audited accounts, is mainly attributed to the improvement in compliance and increase in salaries. She revealed this in her presentation made last week during the National Board of Accountants Auditors (NBAA) seminar for pension funds and employees benefits. Investments have recorded a growth of 21 per cent while membership grew 11 per cent to 1.3 million taking into account members of National Health Insurance Fund (NHIF). The contributions increased by 12.3 per cent and benefits payments increased by 74 per cent exhibiting an exponential growth of benefits obligation. “During the year, investments were dominated by Fixed Income Assets of about 71.4 per cent and properties were 20.3 per cent while equities were 8.3 per cent,” she said. The fixed income assets include Treasury Bills, Treasury Bonds, Fixed deposits, loans and Promissory notes. Social security sector faces various challenges including power outages which increased investments and operational costs, delays in payment of contributions by some employers, pre-mature withdrawals, low yields on Treasury Bills and Treasury Bonds as compared with the level of inflation, delays in the process of benefits claims and inadequacy of benefits as well as limited areas of investments. Mrs Isaka added that SSRA has started working on the problem in collaboration with the ministry of Labour and will issue portability regulations within the first quarter of 2012 to address its transferability. SSRA was established in 2008 and so far it has registered all six social security mandatory schemes in the Mainland Tanzania. They include Government Employees Provident Fund (GEPF), Local Authorities Pensions Fund (LAPF), National Health Insurance Fund (NHIF), National Social Security Fund (NSSF), Parastatal Pensions Fund (PPF), and Public Service Pension Fund (PSPF). During the year, SSRA reviewed the existing legislation that established those schemes to draft amendments that will harmonize the legal and regulatory framework of the Social Security industry in Mainland Tanzania.In collaboration with the Bank of Tanzania, SSRA conducted an actuarial which is at the final stages of analysing the impact of reform parameters to know how each fund can sustain reforms