Tanzania: Regulator to Improve Social Security

"Most funds just provide traditional benefits without flexibility to cover variety of pensioners' needs" she said.

Every pension, according to the authority has its own investment policy, some of which are not favourable to pensioners. There are seven pension funds under different ministries, with different rules and regulations, but have limited coverage.

At least three schemes - Parastatal Pension Fund (PPF), Public Service Pension Fund (PSPF) and Government Employees Pension Fund (GEPF) - report to the ministry of Finance.

The National Social Security Fund (NSSF) reports to the ministry of Labour, Employment and Youth 

Development while the Local Authorities Pensions Fund (LAPF) reports to the Prime Minister's Office (Regional Administration).

By Polycarp Machira, 2 January 2011

The National Hospital Insurance Fund (NHIF) reports to the ministry of Health and Social Welfare.

To achieve the desired goals, the regulatory authority plans to conduct actuarial valuation of all social security schemes in the country by the first quarter of next year in an effort to solve problems facing the sector. The valuation, among other things, will determine the lifespan of the security schemes as some may not live to benefit pensioners at the retirement age.

A well-designed social security scheme, according to Ms Isaka, should be broad-based with adequate coverage and be sustainable for over 70 years. The valuation will also help determine regulations for transferability of membership from one scheme to the other.

As at now, the rules and regulations of the social security funds make it difficult for workers to transfer their benefits to another fund in case the worker changes his job. It has also been noted that the pensions have different pension factors, although all have the same contribution rate of 20 per cent, they have different benefit packages, a factor which is to be reviewed too.

She said there is a need to improve the sector so as to increase national pension coverage, adding that the institution would, among other things, be responsible for advising the government on how to extend the social security coverage into other sectors, including the informal sector.

Data shows that 10.5 per cent of the population comprises paid employees, 1.8 per cent are self-employed with employees, while 9.1 per cent are self-employed without employees.