LAPF membership base goes on to grow steadily

LAPF Millennium Tower Phase II

This is the 30 story project located at Makumbusho area, in Dar es Salaam. Construction works started in July 2009 and completed in August 2014. The building has the following facilities: Shopping mall; Conference center; Offices; Restaurants Discotheque; Multi- purpose function hall; and Parking to serve the building.

Christian Gaya, Business Times Friday June 24-30, 2016
The LAPF Pensions Fund membership base has continue to grow steadily grow, raising from 127,327 members in June 2014 to154,689 members in June 2015.

LAPF Pensions Fund Marketing Manager Mr James Mlowe told The Business Times, that during the year ended June 2014/15 under review, the Fund registered a total of 27,362 new members compared to 23, 228 members registered during the year ended June 2013/2014.

The LAPF Pensions Fund (LAPF), though was first established in 1944 to cover for the employees of the then Native Authorities, has been one of the fastest growing components of the social security pensions industry.

Mlowe said that, up to 30th June 2016 the Fund expects to clock a total of 180,000 members from formal and informal sectors, aiming at creating awareness to various stakeholders in the country regarding the rights and benefits offered by the Fund 

However, contributions increased up to TZS 210.07 billion in year ended June 2014/2015 from TZS 159.23 billion in year ended June 2013/2014.

“Besides the challenges, the Fund has remained competitive and has recorded good performance in 2014/15 financial year. This is a tremendously increase of 32% of contributions recorded at the end of the year”, Mlowe said.

He said that, up to 30^th June 2016 the Fund is expecting to collect a total amount of TZS 286 billion

So far, the benefits paid for 2014/15 stood at TZS 88.60 billion while for 2013/14 the benefit paid stood at TZS 78.23 billion. This was an increase of 13 %.

He said that, this was caused by an increase in the number of beneficiaries paid during the year from 5,056 claimants in 2013/14 to 6,581 claimants in 2014/15.

He furthermore, reveals that the ratio of benefits to contribution has improved from 49% in 2013/2014 to 42% in 2014/15 which signifying that there is an improved financial sustainability.

However, during the period under review 2014/2015 the Fund has been able to register a total of 88 new contributing employers from the competitive market.

“This reflects an increase of customer satisfaction level to the (Tanzanian people) wananchi as a whole” James said.

Equally, investment income increased to TZS 72.8 billion in the year ended June 2015 from TZS 60.76 billion in the year ended June 2014.

While on the other income the report portrayed that the Fund increased the fair value gains on investment properties to TZS 8.9 billion in the year ended June 2015 from TZS 2.6 billion in the year ended June 2014.

The Fund’s total assets increased to TZS 1,053 trillion in the year ended June 2015 from 882.97 billion in the year ended June 2014.

According to the report, the net assets increased to TZS 961.38billion in the year ended June 2015 from 775.3billion in the year ended June 2014. This is a remarkable increase of 24 percent.

However, investment income increased to TZS 72.8 billion in the year ended June 2015 from TZS 60.76 billion in the year ended June 2014, which was an increase of 19 percent

Member’s contributions to LAPF is payable by both employer and the employee whereby civil servants contribute 5% and their employer 15% of their salary.

 Employees and employers from other sectors can choose to contribute either at the ratio of 5%  by 15% or 10% by 10% of employee’s salary respectively. 

Any other ratio can be adopted provided that, an employee contribution does not exceed 50% of total contribution.

Self employed and voluntary members can decide an amount they wish to save. Under this arrangement, member can choose to save under defined contribution (DC) or defined benefit (DB) scheme. The scheme chosen determines the mode of which member can contribute.

LAPF Pensions Fund was first established in 1944 to cover for the employees of the then Native Authorities. Since its inception until the year 2006 the Fund operated under Provident system under the Ministry responsible for Regional Administration and Local Government.

Following the establishment of the Local authorities Provident Fund, Act No. 6 of 2000 transformed the Fund to an autonomous corporate body status under the Board of Trustees.

Latter the Fund was converted to a Pension Scheme under Act No. 9 of 2006 to provide pension benefits to its members and safeguard their contributions by investing in safe and high yield venture.