Survey: NSSF Assets to Hit Tsh3.0 Trillion Mark

NSSF Director-General, Professor Godius Kahyarara.

Christian Gaya Business Times friday June 17-23, 2016

According to surveys show that, the assets held by Tanzania National Social Security Fund (NSSF) are forecast to hit the Sh3 trillion mark this year as the industry is expected to maintain the double digit growth rate seen in recent years.

Collection of contributions from members during the year amounted to TZS 548 billion in the year ended June 2014 from TZS 476 billion in the year ended June 2012/13. The increase was contributed by continued expansion in membership size of the Fund.

During 2013/14 the Fund recorded membership size of 53,866 contributing employers and members from informal sectors. This reflects a growth of 51% as compared to 2012/13 when membership of 35,596 contributing employers and informal sector was recorded

Total amount of benefit paid to members increased to TZS 344.7 in the year ended June 2014 from TZS 228 billion in the year ended June 2012/2013 this was an increase of 51%. This increase shows the Fund's efforts to make benefits payments to its members. Significant benefit payment during the period under review related to withdraw benefit payment which accounted for 82% of all payments made during the year.

Income investments during the year ended June 2013/14 decreased to TZS 222 billion from TZS 252 billion in the year ended June 2012/13. The decrease by 12% was mainly due to decrease in income from interest on loans which accounts for 91% of all income received. 

Deeper surveys conducted by Business Times further, indicate that, in 2001 the collection was Tshs39 billion per year and today the collection has risen tremendously up to Tshs1 trillion, which is a remarkable and great achievement.

The size of the balance sheet was around Ths 169 billion and today the size of the NSSF’s total assets is closing to over Tshs 3 trillion as at June 2014, outstripped other public pension funds in the country.

While, the minimum pension payment was Tshs 50,000 and today the minimum pension benefit payment is Tshs 80,000 per month.  Moreover, today the highest pension benefit payment is Tshs 10,685,000 per month” survey says. 

The investment assets rose sharply by 17.8 percent from Tshs. 2,059.08 billion in June 2013 to Tshs 2,425.69 billion in June 2014

“NSSF has become the benchmark for the social security industry within and outside the East Africa and central Africa in the region. 

According to survey conducted by Business Times, NSSF shows that, has completed investment projects worth 952.411 billion/- over the past decade, with other ongoing projects worth 1.71 trillion/- expected to be completed next year.

Investment income has soared from 1.88bn/-to 251.25bn/-, representing an increase of 2,014.9 percent, while the Fund’s net worth has soared 1,364.7 per cent from 200.31bn/- to 2.93trn/- during 15 years past, survey says.

The Fund has also significantly boosted its efficiency by reducing the pensions benefit processing period from 30 days to 14 days, the report adds

The real rate of return for 2013/2014 was 4.7 percent which was above the real rate of return of 1 percent as per investment policy requirements in order to preserve the value of members’ funds

The survey shows that, recently NSSF completed joint venture projects such as RITA Tower in Ilala Dar es salaam, Kilimanjaro complex, Moshi Kilimanjaro a joint venture project between NSSF/TGGA/UMATI/RED CROSS. And its NSSF project called Mafao House situated in Ilala Dar es salaam

It further reveals some on-going projects as construction of 824 houses, Mtoni Kijichi Dare s salaam project owns by NSSF which is expected to be completed in 2016. Construction of 7460 houses at Dege ECO village at Kigamboni in Dar es Salaam a JV joint venture project between NSSF and AZIMIO which is expected to be completed in 2018; Construction of commercial/office buildings in Shinyanga, Morogoro and Mzizima Dar Es Salaam and are expected to be completed in June 2015, in June 2015, and in March 2017 respectively and all building are owned by NSSF

The report indicates that, the Fund is also expecting to sell 444 serviced plots at Kiluvya in coast region and construction of 5 Star Tourist in the City of Mwanza

Moreover, some coming up projects as sell of surveyed plots in Coast, Dar es salaam and Mwanza regions, construction of new head office building at the heart of Dar es salaam city, construction of a 300 MW power generating plant at Mkuranga Coast region, and construction of football academy structures and facilities at Mwasonga Kigamboni Dar es Salaam

Other major investment projects implemented by NSSF include the $143.5 million Kigamboni bridge, the $544 million DEGE Eco Village in Kigamboni, the Kiluvya Hills project, Mtoni Kijichi estate, and other real estate projects like high-rise office buildings in Dar es Salaam and in other major urban centres across the country.

NSSF investment is in NSSF ACT. No 28 of 1997 section 62 and investment decisions are made by the Board on behalf of the members. In its investment decisions NSSF seeks to provide a reasonable return to members, without compromising the safety of member savings. Currently, NSSF has various investment interests in real estate, equities, and fixed income.

Board’s investment decisions are guided by Fund’s Investment Policy and Social Security Regulatory Authority (SSRA) and Bank of Tanzania (BoT) guidelines”. 

On one hand investment policy requires at least 75% of the total available funds in each year to be invested and policy requires a real rate of return of not less than 1% on the other hand  

NSSF invests in order to maintaining time value of members’ contributions, enhancing the capacity of the Fund to pay meaningful benefits to its members, generating sufficient income to meet administrative expenditure, enhancing financial base of the Fund and supporting of social and economic utility.

According to survey, the NSSF’s Board of Trustees has reasonable expectation that the Fund has adequate resources to continue in operational existence for the foreseeable future.

J F Roslee and T N Doubell of Genesis Actuarial Solutions provides that the Fund was 75.8% funded at the valuation date of 30th June, 2010 in the valuation report dated December, 2011.

In the actuary’s opinion, the contribution rate of 20% of pensionable salaries is sufficient to cover the cost of future benefit accrual (plus administration costs) and the Funds deficit. The Fund was planning to carry out next actuarial valuation as at 30 June 2013 in 2014/2015 financial year.

The National Social Security Fund (NSSF) is registered in Tanzania under the National Social Security Fund Act, 1997 as a registered contribution scheme and administered in Tanzania.

NSSF was established by the Act of Parliament No.28 of 1997 to replace the defunct National Provident Fund (NPF).

The National Social Security Fund (NSSF) is a compulsory scheme providing a wider range of benefits which are based on internationally accepted standards in the region.