Social security funds ‘stable for 60 years’

DAILY NEWS Reporter

THE government has allayed fears over the state of social security institutions, saying they are financially stable and able to prosper for the next 60 years. This follows the monthly injection of funds to the institutions since November last year aimed at clearing arrears to beneficiaries.

In a statement issued in Dar es Salaam, the Social Security Regulatory Authority (SSRA) said the government has injected 2.6 trillion/- into the Public Service Pension Fund (PSFP) as non-cash bond with 6.5 interest rate.

“The non-cash bond is expected to mature at different times to enable the social security fund to meet its demand, including paying the benefits. The times for non-cash bond to mature differ from year to year including those after three years and 10 years,” read part of the statement.

It pointed out further that the actuarial assessment conducted by the International Labour Organisation (WHO) indicated the National Social Security Fund (NSSF) and Parastatal Pension Fund (PPF) could remain stable by 2085 and 2075 respectively.

“Local Authority Pension Fund (LAPF) and Government Employees Pension Fund (GEPF), have the ability to reach beyond 2058 and 2047 respectively. If there is a serious review of the criteria applied in calculation of benefits, then these social security funds are bound to reach 2085,” it said.

The statement further explained that the lifespan after retirement has gone up to 20.8 to male pensioners and 22.2 to female pensioners and that in 50 years to come, it is likely to go up 22.9 to male pensioners and 24.9 to female pensioners. “The pension rate has been improved to 72.5 per cent from the average of 67 per cent in previous years,” it said.

The statement said the government has agreed to clear all debts to all social security funds including National Health Insurance Fund (NHIF), GEPF, LAPF, NSSF and PPF.

It added that NSSF had paid its beneficiaries, who had withdrawn from the fund, by 85 per cent, further saying that SSRA plans to introduce unemployment insurance benefits to meet the challenge of those who still withdraw from the fund. “The insurance will be helping the people who become jobless to sustain themselves while looking for job,” the statement observed.

It further said that SSRA has started to prepare regulations to trim down operational costs to the social security funds and that the funds would not be allowed to spend over 10 per cent as operational costs by July this year.

According to the assessment report, there should be two social security pension funds to minimise operational costs in which GEPF, PSPF and LAPF will be merged to form public sector fund while NSSF and PPF would merge to form a private sector fund.

Another recommendation, according to the report, is formation of one social security fund. The statement noted, however, that the recommendations are subject to recommendations of stakeholders and expert opinion before the decision is made.