By Henry Mwangonde , The Guardian
PENSIONERS with the Public Service Social Security Fund (PSSSF) will now receive 40-percent of their retirement benefits in the wake of a lump sum increase of seven percent.
Finance minister Dr Mwigulu Nchemba said in the National Assembly when tabling central government budget estimates for fiscal 2024/25 that this provision applies for retirees who earlier were paid 50 -percent of total benefits before the merging of pension schemes in 2018.
The budget also proposes a two percent increase to reach 35 percent for retirees who earlier were paid 25 percent of their total savings before the merging of the various pension schemes.
The changes will be used for retirees from the year 2022/23 and maintained up to 2029/30, after which the government will decide on the formula to be followed, he said.
Current pension arrangements are set at 33 percent of savings in lump sum, followed by indefinite monthly pensions, after amending Section 25A of the Social Security Benefit Schemes (Regulations).
The regulations effected on July 1, 2022 explained by an annual accrual factor of 2.07 percent and commutation factor set at 12.5 per-cent.
In 2018, President John Magufuli directed that pension funds revert to the old pension payment formula under which pensioners were paid 50 percent of their total savings instead of the 25 percent stipulated in highly controversial proposals.
The proposed regulations were followed by the merger of five public pension schemes into the PSSSF, sharing the field with the National Social Security Fund (NSSF).
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