Pay Sh6.5tr PSPF debt, Bunge panel tells State

PSPF board chairman George Yambesi

By Peter Nyanje
The Citizen Reporter 

Dodoma. The parliamentary Economy, Industries and Commerce Committee is pressuring the government to pay almost Sh6.5 trillion it owes the Public Sector Pension Fund (PSPF). 

The staggering debt came to the attention of the committee on Saturday when the PSPF management and the fund’s chairman of the board of trustees, Mr George Yambesi, briefed the team on its operations. 

The committee chairman, Mr Mahmoud Mgimwa (Mufindi North – CCM), said the government should pay the debt to enable the pension fund to operate without problems. 

He said that from the briefing they established that the PSPF was one of efficiently run pension funds and its operations benefited a lot of public servants. 

“This makes the fund a needed outfit in the country... I want to promise the PSPF management and the Board of Trustees that our committee will ensure that the government pays this money in order to enable you to serve many people,” he said.

Briefing the committee members earlier, PSPF acting director general, Mr Adam Mayingu, noted that the debt originated in 1999 when the government decided to establish the fund and shift all public servants to it, though they had not contributed to the scheme before.

“At the time of establishment, it was estimated that Sh250 million was needed as compensation for the workers who were shifted from the government. The government did not bother to pay it and actuarial done by the regulatory authority in 2010 showed that the debt had grown to Sh6.49 trillion,” said Mr Mayingu when briefing the MPs. 

He said that the government had agreed to start repaying in the 2009/10 financial year…it promised to pay Sh716 billion in ten years, but until now it has paid Sh30 billion only,” he said. 

Mr Yambesi noted that the PSPF was the best innovatively run fund in the country and it invests in profitable areas of national interest such as construction of universities. 

But, he noted that the delay to settle the government debt might affect future plans of the fund whose running cost was very low compared to other funds. “Our investment ability is being curtailed by the government delay to pay the debt,” he said.