Labour and Employment minister, Gaudensia Kabaka
The formula will have all pension funds operate under this new arrangement.
Addressing journalists in Dodoma, Labour and Employment minister
Gaudensia Kabaka said before reaching the decision to review the
formula, there was a lot of outcry from pensioners, some saying they
were getting small amounts of pensions compared to others.
“That’s why we decided to harmonise social security schemes pension
benefits so that all funds offer pensions based on specified
benchmarks,” the minister said.
Dr Kabaka, who was accompanied by her deputy, Dr Makongoro Mahanga
said the government through Social Security Regulatory Authority (SSRA)
made the accrual rates review of all pension funds.
“From July 1, this year, members of National Social Security Fund
(NSSF), Parastatal Pension Fund (PPF), and the Government Employees
Pension Fund (GEPF) who were supposed to get 60 to 67 percent of their
benefits, will get 72.5 percent,” the minister said.
According to Dr Kabaka, the new formula will also benefit members
of the Local Authorities Pensions Fund (LAPF) and the Public Service
Pension Fund (PSPF) soon after retiring.
The minister further said under the social security schemes
pension’s harmonisation rules; some of the changes which have been made
include the indexation of pension benefit that makes retired people to
live decent lives as per Section 32 (a) of law number 8 of 2008.
“From now on, pensions will be undergoing actuarial valuation from time to time,” she said.
The minimum pension benchmarks have been set for PSPF, GEPF and LAPF, which had no such scales before.
Citing example, the minister said, “Here a retired person who gets a
pension below 40 percent of calculated salary, will now get 40 percent
of the basic salary in a particular sector.”
SSRA Director General Irene Isaka said the new harmonisation rules
provide room for pensioners to have a choice of getting 100 percent of
their pension benefits or 75 percent of the amount and pick the
remaining on installment later.
She also said the new rules will not involve pensioners of PSPF and LAPF but “the new members of the two funds.”
The SSRA boss said the 72.5 percent will be the highest in Sub-Saharan Africa and in the East African region in particular.
The official said that before reaching the decision to calculate
the new formula several stakeholders were involved, including workers’
unions, pension funds and other players.
“But, the challenge ahead is to provide education to pensioners so as to understand what the formula means,” Irene said.
SOURCE:
THE GUARDIAN
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