SSRA and establishment of supplementary schemes

 

Pensioners money at work-NSSF water front house

Most people in the country, especially the young ones, are daily withdrawing their pension contribution prematurely while on one side consider saving for pension retirement a venture not worth the bother, and on the other side those already saving for old age have no idea what happens in their pension schemes due to the lack of pension literate awareness.

The social security regulatory authority (SSRA) which was established under social security regulatory authority Act No 8 of 2008 as amended by Act No. 12 of 2012 to regulate the social security sector in the country has started the registration of supplementary social security schemes whose membership will be voluntary to be chosen by the members from existing  social security pension schemes such as  National Social Security Fund (NSSF), Public Service Pension Fund (PSPF), Parastatals Pensions Fund (PPF), Local Authority Pensions Fund (LAPF), National Health Insurance Fund (NHIF) and Government Employees Provident Fund (GEPF) so as to compliment short term and long term benefits offered by any of the above mandatory schemes. This means the member will enter into a contract with any of pension scheme voluntarily by paying a certain per centum monthly agreed together with the scheme terms in return of long term and short term benefits.

The short term benefits stipulated by convention No. 102 of 1952 of international labour organization (ILO) are said to be maternity benefits, employment injury and occupational diseases,  social health insurance, and funeral grants, child relief, and unemployment benefits, while long term benefits that also are recognized by ILO such as pension retirement, invalidity pension and survivors pension.

Expected to set the pace for the entire pension industry will be a national pension conference in November, where all stakeholders will craft a policy document.

Currently the social security regulatory authority is on the move to finalize a policy that includes introduction of a universal pension scheme whereby such a scheme is working in countries like as Kenya, Botswana and South Africa where the state offers pension for all its citizens, funded by tax payers. The main concept here is to have a basic scheme, which should provide pension to all citizens who attain the age of 6o years, to be paid by the tax payers.

 

It is high time now for SSRA to focus on setting up at least four pillars to ensure all citizens have a reasonable and sustainable standard of living upon retirement though the majority of population is lack a saving culture. Four pillars must be constructed by SSRA, to ensure this objective is achieved.

 

The first pillar will be a universal pension scheme, a basic safety net that will cover all Tanzanians by citizenship attaining the age of 60 years and above. The second pillar, already in place, are the National Social Security Fund (NSSF), Public Service Pension Fund (PSPF), Parastatals Pensions Fund (PPF), Local Authority Pensions Fund (LAPF), National Health Insurance Fund (NHIF) and Government Employees Provident Fund (GEPF) a provident fund, where both employers and employees make statutory contributions .These are mandatory social security institutions that are operating under the social insurance principles in accordance with minimum acceptable standards and benchmarks. The third is the promotion of more pension schemes, where both employers and employees contribute.

And the last pillar is the individual pension scheme plan, where an individual contributes to compliment benefits. Supplementary Schemes under SSRA Act No 8 of 2008 means voluntary schemes that can be chosen by the insured members themselves to compliment benefits of any of those mandatory schemes at least to  cater for different social services like health, pensions and other types of insurance over and above those provided by mandatory and social assistance programmes. These schemes shall be run by employers, private companies, professional bodies and community-based organisations (CBOs).

When all these four pillars shall be in place, any Tanzanian will be able to have a reasonable and sustainable level of living upon retirement as and this should be the main vision of SSRA.

t is up to the SSRA to ensure that it joins hands together with its all social partner organizations in pushing for a policy document that should realise this objective, including making it compulsory for one to contribute to a pension scheme. Group of people who should be targeted should be the people who are in informal sector, which comprises more than 94 per cent of the country’s workforce. The existing mandatory social security schemes currently cover only 6 percent of the labour force estimated at 16.0 million.

Presently, there is none of companies running individual pension schemes in the country that could target to provide their services and products for people in the informal employment.