ZSSF on the blink of collapse, cautions DG

ISSA YUSSUF in Zanzibar

ZANZIBAR Social Security Fund (ZSSF) has a bleak future unless stringent reforms are devised to rescue the fund, members of the house of representatives were told here yesterday.

ZSSF Managing Director Abdulwakil Hafidh, in his report to the legislators on the status of the fund since its establishment over ten years ago, said a lot has been achieved but the sustainability of the fund remains uncertain, necessitating legal reforms.

“We have been paying huge amount in retirement pension, about four-times of the collections...the contributions by employees and employers also remain minor and dishonesty of some employers are also threatening the future of ZSSF,” Mr Hafidh noted.

In efforts to make the fund sustainable, the Managing Director said his office had come up with some proposals, including a 40 percent reduction of payable retirement amount, increased period for contribution from the current five to 13 years and increased percentage of contribution from 15 to 20, with employees paying seven percent and employers’ 13 percent.

“Other proposals include raising of benefits by 25 percent, introduction of low pension payment which is 30 percent of the basic salary and enforcement of reformed regulation concerning the submission of contribution,” Mr Hafidh said ahead of the tabling of an amendment Bill.

Under the envisaged amendment, it’s recommended that every contribution, “shall be paid in a prescribed manner to the fund within fifteen days after each month in which such contributions relate…and contravention to that it is an offence which may lead to fine of not less than 5m/- or one –year imprisonment or both.

” During the meeting that the fund convened with the legislators to highlight the key issues on the proposed reforms, both the Minister for Finance Dr Khalid Salum Mohamed and the Speaker of the House Zubeir Ali Maulid asked the lawmakers to argue for better future of the fund.

ZSSF was established under the Zanzibar Security Fund Act No. 2 of 1998 subsequently amended by the Zanzibar Social Security Fund Act No. 9 of 2002 and re-enacted by the Act No. 2 of 2005.

Prior to the enactment of the Act and establishment of the Zanzibar Social Security Fund, there was no formal social security scheme in Zanzibar.