Delays hog pension gratuity payments

ABDALLAH MSUYA in Dodoma

THE Controller and Auditor General (CAG) report has painted a grim picture of social security funds, revealing serious delays in paying pension gratuities to retirees.

According to the CAG’s annual general report on the financial statement for the year ending 30th June, 2016, all pension funds delayed gratuities to pensioners, causing serious ...

hardships to beneficiaries.

“We noted serious delays in paying pension gratuities to PSPF pensioners this year, something that applied to all other pension funds as well,” noted CAG, Prof Mussa Assad.

He said delays in payment of gratuities were due to failure by employers to comply with remittance of statutory deductions payable to pension funds.

“A total of 284bn/- payable to Pension Funds and NHIF were delayed for a period ranging from 30 to 90 days after the payment of monthly salaries, contrary to Pension Funds Acts and NHI Act,” he revealed, adding; “This was also the case for Pre-99 PSPF obligations and prior years’ pension arrears for all pension funds.”

The CAG warned that the delay in the processing of terminal benefits was inconvenient to the public sector retirees in the country and cost a great deal of resources to the government in terms of penalties.

“Technically, penalties imposed to the government and unnecessary hardships to retirees should have been avoided if the government honoured her obligations with pension funds particularly PSPF on time,” suggested Prof Assad.

He called for strict control and review mechanisms in the preparation of pension papers for retirees by employers.

“Lapses of internal controls and weaknesses on the part of the accounting officer offer an opportunity to dishonest employees to abuse pension payment system in the pretext of inaccurate computations, something that could cost the government and pensioners, if pre-audit by chance also fails to uncover,” Prof Assad stated.

The CAG, on the other hand said, delays in the remittance of pension contribution and settlement of outstanding obligations with pension funds by the government, led to a serious delay in paying pension gratuities to pensioners during the year under review.

“This practice cause unnecessary hardships to retirees and liquidity problem to pension funds if it remains unchecked,” he warned.

The CAG proposed that government through accounting officers should enhance control and review mechanism over the processing of pensions and ensure that employees’ contributions are timely remitted.