DAR ES SALAAM: THE National Social Security Fund (NSSF) has announced a robust strategic plan to expand its membership by targeting over 20 million people from the untapped informal sector.
The national informal sector scheme, set to launch this year, comes as the NSSF’s funding level has reached 90 per cent, according to the Fund’s Director General Masha Mshomba.
“We are pleased to report that our funding level has reached 90 per cent. The Fund is experiencing growth in its portfolio, with a notable rise in the overall value of our investments,” Mshomba stated during a meeting with editors in Dar es Salaam on Tuesday.
A funding level of 90 per cent means the Fund has sufficient assets to cover 90 per cent of its projected future liabilities essentially the benefits owed to retirees and beneficiaries.
Experts suggest that a 100 per cent funding level indicates full funding, where assets meet all obligations. A level below 100 per cent signifies underfunding, which may lead to potential shortfalls in benefit payouts if not addressed over time.
While a 90 per cent funding level indicates a reasonably healthy status, it highlights the need for continued attention to ensure future obligations are met.
With plans to reach new members from the informal sector, Mshomba is confident that the 100 per cent mark will be achieved soon.
He noted that the Fund’s market value of assets such as stocks and real estate continues to rise, and earnings from these investments, including dividends and interest, contribute to overall growth.
Currently, the Fund disburses 11bn/- monthly payment to over 30,000 pensioners, while also reinvesting earnings to significantly compound its growth.
Recently, NSSF projected its value to hit 11tri/- by 2026, attributing this to a conducive investment environment in the country. This projection represents more than double the value recorded in 2021 when the sixth phase government under President Samia Suluhu Hassan assumed office.
NSSF’s unaudited financial reports indicate that for the 2023/24 fiscal year, the Fund’s value stood at 8.5tri/-, reflecting a 77 per cent increase compared to the previous three years. “This growth is substantial when compared to the Fund’s value three years ago, demonstrating consistent annual increases,” Mshomba added.
He explained that a favourable investment climate has encouraged contributions from both local and international private sector members, benefitting NSSF through statutory contributions.
NSSF Director of Operations, Mr Omary Mziya, elaborated that new members from the informal sector will be served through the National Informal Sector Scheme (NISS), established in 2018.
This programme aims to broaden social security coverage for groups that currently lack access, while also stimulating economic growth for citizens and the nation as a whole.
“We are actively educating various groups to encourage participation in this programme. Our goal is to attract at 21 million new members from the informal sector,” Mziya stated.
He emphasised that joining the programme is voluntary, underscoring the importance of education to help individuals make informed decisions. While they have begun attracting members, the current numbers remain low and efforts to reach a broader audience are ongoing.
“The informal sector is often referred to as the ‘missing middle’ in pension schemes due to several factors, including lack of coverage. Many informal workers self-employed individuals, gig workers and casual employees are not included in formal pension schemes, leaving a significant portion of the workforce without retirement savings,” he explained.
Other challenges include irregular income, as informal sector workers often experience fluctuating and unpredictable earnings, making it difficult to commit to regular pension contributions.
To address this, NSSF has developed a system accommodating members with irregular incomes, allowing contributions of 1,000/- per day to meet the minimum required monthly contribution of 30,000/-.
The Systems Manager at NSSF, Mr Mihayo Selemani noted that leveraging ICT aims to ensure all members can access services through the NSSF Portal.
No comments :
Post a Comment