Thursday, December 27, 2012

Tanzania: Regulator to Improve Social Security

According to the DG, the authority that was formed two months ago would ensure schemes remain secure and sustainable, members' interests are protected and coverage is increased.

It would also ensure that funds are invested according to rules or investment guidelines as the government looks at the possibility of widening coverage of social security services in the country, to include people who are self-employed in the informal sector.

It would conduct public awareness for all stakeholders of social security before issuance of regulations and guidelines.

On the other hand, the authority will put in place capacity building programmes and establish a research department with a robust database and an in house actuary to facilitate development of social security products.

Recently, the World Bank's Financial Sector Support Project (FSP) prompted the Bank of Tanzania to invite consultants to bid for the reviewing of the existing investment portfolio of the social security schemes in the country.

The objective was to review the funds' investment markets, portfolios and policies with a view to structuring sharp investment guidelines for them.

Apparently, the new project seeks to control the hitherto unregulated schemes. Allegations are high that some of the funds are investing in unviable projects, lending to non-members and taking overly long to issue members' benefits.

It is expected that the harmonization of the legal and regulatory framework will start during the first quarter of 2011.

The regulator will make sure the schemes remain secure and sustainable, members interests are protected, there is increased coverage and funds are invested according to rules or investment guidelines.

It would ensure appropriate disclosure as schemes, managers and custodians provide timely information. 
Above all, it would guarantee that shortfalls are identified and appropriate actions taken.

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