Rwandan
retirees are seeking an increase in their pension benefits, arguing
that what they get is too little for one to live a decent life.
(Emmanuel Ntirenganya)
Pensioners have for long complained about what they call peanut
benefits. According to the pensioners’ association, retirees receive
miserably low monthly pension payments, which “do not reflect the
economic realities of today”.
However, this could soon end following a plan to address these grievances through a new law that is currently awaiting approval; also the Rwanda Social Security Board is working to review the pension scheme to ensure all retired workers lead comfortable lives. story on page 12
Pensioners could soon smile all the way to the bank following plans by the Rwanda Social Security Board (RSSB) to review their monthly payments to ensure the retirees live more comfortable lives.
The move follows incessant complaints from pensioners that the monthly payments they receive from the pension body do not reflect the present economic realities due to the relatively high cost of living nowadays.
RSSB says it has contracted experts to study the “state of pension in Rwanda to see how it can be revised to ensure that after serving the nation diligently, former workers lead normal lives during retirement.
The board has contracted Government Actuary Department (GAD), a UK-based firm, to conduct the study. The firm uses statistical data to provide actuarial review and advice for social security and insurance schemes arrangements both in UK and overseas.
The RSSB review also comes on the heels of complaints about unrealistic pension benefits raised during the National Dialogue in December last year, and have also been presented before Parliament.
Why pension review
RSSB chief executive officer Dr Daniel Ufitikirezi says GAD started work in August, and is expected to complete the study by the end of the month.
He says the key issues the study will consider include assessing the contributions to the pensions scheme, the amount of money spent on benefits, as well as Rwanda’s economic conditions and seeing how the body can review the pension it pays to retirees.
Ufitikirezi, however, notes that the pension review would be in such a way that it should not hurt RSSB operations.
“Indexing pension involves many economic factors. If you raise pension payouts without increasing contributions, it will definitely have a negative impact on the scheme,” he explains.
Rwanda’s pension contribution rate is 6 per cent of the pensioner’s salary, according to RSSB.
Figures from Rwanda Association of Pensioners show that there are about 10,546 pensioners in Rwanda, almost 10 per cent of the working population.
Though this development should be good news in the ears of retirees, the pensioners say they have been ignored in the process, adding that the study and eventual pension review should accommodate their views and focus on the real issues they face.
Felix Nzabahimana, the executive secretary of the Rwanda Association of Pensioners (ARR), says the review should focus on raising pension benefits to ensure pensioners lead better lives.
“Commodity prices have gone up, but the pension payments have remained the same over the years. Remember, the pension scheme’s key role is to make sure pensioners’ welfare is not affected in their twilight days.
“Pensioners, some of who are unable to walk, are being paid about Rwf5,000 per month... How do you expect them to lead decent lives on such little money,” he said.
He says the review should consider the present economic realities, noting that the current policy is outdated.
Nzabahimana says research carried out by ARR in 2011 revealed that those who get pension benefits ranging from Rwf5,200 and Rwf20,000 represented 40 per cent of all pensioners.
Those getting Rwf100,000 and above were 0.5 per cent.
“Only those who were being paid between Rwf50,000 and Rwf100,000 per month would afford vitamin-rich diets at least once a day,” he says, adding that many of the pensioners were surviving on ‘poor diet’.
Damien Ndizeye, the executive secretary of Rwanda Consumers Rights Protection Organisation, says pensioners should be paid between Rwf200,000 and Rwf400,000 per semester. Ndizeye claims that there are some retirees who get benefits of as low as Rwf7,000 or 10,000 a month, adding that such people should be supported to set up income-generating projects to improve their standards of living.
Why pension increase
Pensioners say the monthly package they receive is too little compared to market prices.
Froduald Munyakayanza, a retiree, says the pension review should prioritise the welfare of the oldest pensioners, arguing that most of them are living in hard conditions due to meager pension they receive.
The former National Bank of Rwanda worker says previously, Rwf5,000 would buy commodities his family would use for a week, “but now, the same money can only buy a few things”.
Another retiree, Sarah Mukandereye, says the pension review has been long overdue.
Pension Bill for approval The chairperson of the standing committee on social affairs, Marie Rose Mureshyankwano, says Parliament completed reviewing the pension Bill in July, and the Bill is currently awaiting the approval of the chamber of deputies plenary.
The new Bill seeks to address ‘loopholes’ in the pension scheme so as to ensure pensioners live almost same life as they used to have when they were still working.
“The Bill provides for an increase in pension benefits, but after a study has been conducted to show how this would be done without hurting RSSB,” she notes.
She adds that the Bill provides that RSSB should carry-out actuarial reviews every five years to adjust pension benefits according to the cost of living.
“The new Bill will ensure that all employees have rights to pension, and gives Rwandans the flexibility to choose the pension scheme to subscribe to. It also streamlines many family issues, especially rights of beneficiaries to pension benefits,” Mureshyankwano points out.
The Rwanda public pension scheme was at Rwf55.5 billion as at June 30, up from Rwf55.2 billion in June 2013, and about Rwf12.4 billion was paid out in benefits over the same period compared to Rwf9.9 billion last year, according to central bank data.
*******************
Pensioner’s testimony
My children dropped out of school due to lack of fees - retiree
Jean Marie Vianney Karekezi, 67, is a retiree in Kimisagara in Nyarugenge District, Kigali. Karekezi says of his five children, only one of them completed university, while others dropped out of school due to lack of tuition fees. His wife suffers from rheumatism. Karekezi talked to Business Times’ Emmanuel Ntirenganya about his life before and after retirement:
I started started working at the National Bank of Rwanda from
November 1969, and retired in 1994. Since then, I have not got any
regular job. Between 1970s and the 90s, I used to earn about Rwf34,000 a
month. That time, the franc had more value and one could afford a
decent lifestyle.
A kilo of Irish potato varied between Rwf1 and Rwf3; a bottle of Primus ranged from Rwf21-Rwf25; house rent was Rwf500. Now, a kilo of Irish potatoes is at over Rwf200, whereas a bottle of Primus is Rwf700. The Rwf16,390 pension I get monthly cannot sustain my family for a week let alone paying rent.
I sympathise with fellow retirees, who get just Rwf7,000 or Rwf10,000 in benefits a month. This has deprived us the right to basic needs of life.
Though I have Mutuelle de Santé, this insurance does not cover all medical bills. Elderly people have a weakened body that is prone to many ailments and serious diseases, so we need special care and treatment. I am one of the lucky pensioners because I have rentals from which I get Rwf40,000 per month, which has done a lot to ease my problems compared to other pensioners.
However, this could soon end following a plan to address these grievances through a new law that is currently awaiting approval; also the Rwanda Social Security Board is working to review the pension scheme to ensure all retired workers lead comfortable lives. story on page 12
Pensioners could soon smile all the way to the bank following plans by the Rwanda Social Security Board (RSSB) to review their monthly payments to ensure the retirees live more comfortable lives.
The move follows incessant complaints from pensioners that the monthly payments they receive from the pension body do not reflect the present economic realities due to the relatively high cost of living nowadays.
RSSB says it has contracted experts to study the “state of pension in Rwanda to see how it can be revised to ensure that after serving the nation diligently, former workers lead normal lives during retirement.
The board has contracted Government Actuary Department (GAD), a UK-based firm, to conduct the study. The firm uses statistical data to provide actuarial review and advice for social security and insurance schemes arrangements both in UK and overseas.
The RSSB review also comes on the heels of complaints about unrealistic pension benefits raised during the National Dialogue in December last year, and have also been presented before Parliament.
Why pension review
RSSB chief executive officer Dr Daniel Ufitikirezi says GAD started work in August, and is expected to complete the study by the end of the month.
He says the key issues the study will consider include assessing the contributions to the pensions scheme, the amount of money spent on benefits, as well as Rwanda’s economic conditions and seeing how the body can review the pension it pays to retirees.
Ufitikirezi, however, notes that the pension review would be in such a way that it should not hurt RSSB operations.
“Indexing pension involves many economic factors. If you raise pension payouts without increasing contributions, it will definitely have a negative impact on the scheme,” he explains.
Rwanda’s pension contribution rate is 6 per cent of the pensioner’s salary, according to RSSB.
Figures from Rwanda Association of Pensioners show that there are about 10,546 pensioners in Rwanda, almost 10 per cent of the working population.
Though this development should be good news in the ears of retirees, the pensioners say they have been ignored in the process, adding that the study and eventual pension review should accommodate their views and focus on the real issues they face.
Felix Nzabahimana, the executive secretary of the Rwanda Association of Pensioners (ARR), says the review should focus on raising pension benefits to ensure pensioners lead better lives.
“Commodity prices have gone up, but the pension payments have remained the same over the years. Remember, the pension scheme’s key role is to make sure pensioners’ welfare is not affected in their twilight days.
“Pensioners, some of who are unable to walk, are being paid about Rwf5,000 per month... How do you expect them to lead decent lives on such little money,” he said.
He says the review should consider the present economic realities, noting that the current policy is outdated.
Nzabahimana says research carried out by ARR in 2011 revealed that those who get pension benefits ranging from Rwf5,200 and Rwf20,000 represented 40 per cent of all pensioners.
Those getting Rwf100,000 and above were 0.5 per cent.
“Only those who were being paid between Rwf50,000 and Rwf100,000 per month would afford vitamin-rich diets at least once a day,” he says, adding that many of the pensioners were surviving on ‘poor diet’.
Damien Ndizeye, the executive secretary of Rwanda Consumers Rights Protection Organisation, says pensioners should be paid between Rwf200,000 and Rwf400,000 per semester. Ndizeye claims that there are some retirees who get benefits of as low as Rwf7,000 or 10,000 a month, adding that such people should be supported to set up income-generating projects to improve their standards of living.
Why pension increase
Pensioners say the monthly package they receive is too little compared to market prices.
Froduald Munyakayanza, a retiree, says the pension review should prioritise the welfare of the oldest pensioners, arguing that most of them are living in hard conditions due to meager pension they receive.
The former National Bank of Rwanda worker says previously, Rwf5,000 would buy commodities his family would use for a week, “but now, the same money can only buy a few things”.
Another retiree, Sarah Mukandereye, says the pension review has been long overdue.
Pension Bill for approval The chairperson of the standing committee on social affairs, Marie Rose Mureshyankwano, says Parliament completed reviewing the pension Bill in July, and the Bill is currently awaiting the approval of the chamber of deputies plenary.
The new Bill seeks to address ‘loopholes’ in the pension scheme so as to ensure pensioners live almost same life as they used to have when they were still working.
“The Bill provides for an increase in pension benefits, but after a study has been conducted to show how this would be done without hurting RSSB,” she notes.
She adds that the Bill provides that RSSB should carry-out actuarial reviews every five years to adjust pension benefits according to the cost of living.
“The new Bill will ensure that all employees have rights to pension, and gives Rwandans the flexibility to choose the pension scheme to subscribe to. It also streamlines many family issues, especially rights of beneficiaries to pension benefits,” Mureshyankwano points out.
The Rwanda public pension scheme was at Rwf55.5 billion as at June 30, up from Rwf55.2 billion in June 2013, and about Rwf12.4 billion was paid out in benefits over the same period compared to Rwf9.9 billion last year, according to central bank data.
*******************
Pensioner’s testimony
My children dropped out of school due to lack of fees - retiree
Jean Marie Vianney Karekezi, 67, is a retiree in Kimisagara in Nyarugenge District, Kigali. Karekezi says of his five children, only one of them completed university, while others dropped out of school due to lack of tuition fees. His wife suffers from rheumatism. Karekezi talked to Business Times’ Emmanuel Ntirenganya about his life before and after retirement:
Karekezi says he is a bit better off than many retirees because of the money he earns from a rental.
A kilo of Irish potato varied between Rwf1 and Rwf3; a bottle of Primus ranged from Rwf21-Rwf25; house rent was Rwf500. Now, a kilo of Irish potatoes is at over Rwf200, whereas a bottle of Primus is Rwf700. The Rwf16,390 pension I get monthly cannot sustain my family for a week let alone paying rent.
I sympathise with fellow retirees, who get just Rwf7,000 or Rwf10,000 in benefits a month. This has deprived us the right to basic needs of life.
Though I have Mutuelle de Santé, this insurance does not cover all medical bills. Elderly people have a weakened body that is prone to many ailments and serious diseases, so we need special care and treatment. I am one of the lucky pensioners because I have rentals from which I get Rwf40,000 per month, which has done a lot to ease my problems compared to other pensioners.
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