'More time needed to put all pension funds under one ministry'

By The guardian reporter

Deputy Minister for Labour and Employment, Dr Makongoro Mahanga

The government has said the decision to put all pension funds under one ministry would take long time since there are a lot of things which need to be done first.

This was said last week in Arusha by the Deputy Minister for Labour and Employment Dr Makongoro Mahanga at the just ended 23rd PPF annual members and stakeholders conference.

He said it was a good idea but its implementation would not be possible soon because some crucial changes need to be effected.

“All the pensions were established under different laws, so we have to harmonise them,” he said.
He said the current review of pension funds regulations which is done by the Social Security Regulatory Authority (SSRA) would assist the government to make good decisions.

Currently, six pension funds report to different government entities: the National Social Security Fund (NSSF) reports to the Ministry of Labour and Employment; three others (the PPF Pensions Fund, the Public Service Pension Fund and the Government Employees Provident Fund) report to the Ministry of Finance; the Local Authorities Pension Fund reports to the Regional Administrative body of the Prime Minister's Office; and the National Health Insurance Fund reports to the Ministry of Health and Social Welfare.

In accordance with the Social Security Regulatory Authority Act of 2008, the Tanzanian government officially inaugurated the Social Security Regulatory Authority in March 2011.

The regulatory body is tasked with harmonising the legal and regulatory framework governing the social security sector, particularly the six separate pension funds operating around the country.

The social security sector has been characterized by a high degree of fragmentation of different schemes, low coverage levels and high administrative costs.

The new regulatory authority aims to facilitate the extension of coverage to non-covered groups while also streamlining the rules and regulations governing administrative reporting structures, investment, and the transferability of rights from one fund to another, including through conducting public awareness campaigns for stakeholders.

Moreover, while contributions are uniform across pension funds (20 per cent), benefit packages and investment regulations can vary significantly.

For her part, the SSRA Director General, Irene Isaka, said they have completed harmonising all pension funds laws and the recommendations have been forwarded to higher authorities in the government.
If approved, the harmonisation process will take place before year 2015 where there will be free movement of members from one fund to another with the same benefit rights.

She pointed that the comprehensive actuarial valuation of the five social security schemes has been completed in collaboration with the Bank of Tanzania (BoT).

“We have already met stakeholders, so we await cabinet to give a go ahead so that a new system can be used,” she said.

She also said, the authority is developing a communication strategy that would address various challenges facing social security schemes including awareness campaigns. 

SOURCE: THE GUARDIAN