Changes to social security law hailed

By The guardian reporter

17th April 2012

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  Members: If properly effected, it will boost services, benefits

Minister for Labour and Employment Gaudencia Kabaka

Newly passed amendments placing all six social security funds under the Ministry Labour and Employment and directing harmonisation of benefits calculations in a bid to improve the sector have been well received.

Under the previous set up each social security fund was formed under its own law, reported to a different authority and used different formula to calculate benefits for its members.

Members interviewed by The Guardian said the measures would go a long way in improving the way the funds served members and their sustainability.

“We are happy that there will be freedom for members to choose the fund they wanted to join,” said Hamad Said of Temeke, pointing out that it was also a wake-up call for funds offering members poor services.

Siegfrid Kalau of a firm in Dar’s IT sector said he hoped the Social Security Regulatory Authority would strictly ensure that members’ funds are invested wisely.

Before the amendments the Parastatal Pension Fund (PPF), Public Service Pension Fund (PSPF) and Government Employees Pension Fund (GEPF) reported to the ministry of Finance, while the National Social Security Fund (NSSF) was under the Ministry of Labour and Employment and the Local Authorities Pensions Fund (LAPF) came under the Prime Minister’s Office (Regional Administration).

The National Hospital Insurance Fund (NHIF) reported to the ministry of Health and Social Welfare.

The amendments presented to the House by the Minister for Labour and Employment Gaudencia Kabaka Social Security Funds besides harmonising the benefits calculations formulae, also requires that it take into account the entire service period of a member, life span after retirement, the pension value compared to the avalanche of value for money and inflation, as well as service integration for members who had worked in different places.

Social Security Regulatory Authority act no.8 of year 2008, section 30 requires all employers to give new employees the opportunity to join a social security fund of their choice.

The amendments also open the door for competition in membership registration, with the criteria for all Social Security Funds being good service delivery and additional products from those stated by ILO Convention 102.

Minister Kabaka said the more than 150 amendments aimed to change Social Security Funds laws, Authority law, and Insurance law and include missing provisions to improve social security services, benefits, reduce operating costs, provide guidelines, including investment guidelines.

She said many members had complained of not benefiting from investments made by Social Security Funds.

She said the government through the Social Security Regulatory Authority aimed to ensure sustainability of the funds, protect interest of members, increase coverage and reduce the burden to the Government. The amendments empower Authority to set benefit calculation formulae, issue regulations, conduct actuarial valuation, conduct compliance and other function as stated in the SSRA act section 5 with exception of policy issues.

It was also the government vision that eventually every Tanzanian would become a member of social security funds.

She said the amendments also entailed changing names of some Funds to enable them to register members in the market both from formal and informal sectors. Currently only 3.5 percent of all Tanzanians are members of Social Security Funds and only 6.5 percent of the work force are members of schemes.

Number of board members both for the Authority and the Social Security Funds has been reviewed and clearly stated that it will range between 7-9 depending on the size of the Fund, also enabling good representation of employers, employees, governments and professionals.

Social Security Funds Investments will be guided by investment guidelines to be issued by Authority in collaboration with the central bank.

According to new changes any employer with foreign employees will have to remit all employees’ contributions to the Social Security Funds, regardless to their nationality as this will increase coverage, membership and size of the fund.

SOURCE: THE GUARDIAN

Why non-take-up of social health insurance benefit is increasing Written by Gaya Friday, 03 February 2012 07:15 Social health insurance benefit is an important catalyst for socio-economic development in a country. Tanzania is one of the poorest countries in the world with estimated GNP per capita of about USD 260.00 (2000 estimates) and a GDP growth rate of about 4.0 percent per annum. The population growth rate is 2.8 percent per annum. Agriculture is the mainstream of economy and accounts for 75 to 78 percent of the total export earnings. The total export earnings are sufficient to meet only one third of the country’s import requirements. Social health insurance is also an important stimulus for development of the health sector in a country. It helps to strengthen accessibility, affordability, equity and quality of health care. In Tanzania the state of health amongst the population is poor notwithstanding the tremendous drive by the Government to remedy the situation. The crude birth rate is around 41 per 1,000 populations and the fertility rate is 5.6. Infant mortality rate is about 99 per 1,000 populations and the average life expectancy at birth is about 49 years (female) and 47 years (male). HIV/AIDS prevalence rate among adults is about 10–14 percent. There is wide disparity in the availability of health services from one part of the country to another. The socio-political climate in the country is characterised by increased interest in privatisation and shift of the economy from socialist orientation to capitalist market orientation. Globalisation is also taking the country by storm and the population dynamics are rapidly changing. Rural–urban migration is rapidly rising. All these changes demand establishment of social institutions like the social health insurance schemes to stabilize the economy. NSSF is a Social Security Organization administering several social security benefits to its members and their dependants. The Act establishing the Fund empowers it to administer social health insurance benefit to its members. The Tanzania population has been exposed to free medical care for several decades. The concept of social health insurance is new to them and may not be readily understood and accepted. It is well known that the Fund is well established and has been operational for several years. And we believe that up to date the Fund has enough capacity, in terms of health manpower, to handle the demands of social health insurance scheme. The government has put in place a number of policy initiatives and strategies to stem poverty and strengthen health care and delivery in the country. GDP growth rate per annum is targeted to rise from 5.2 percent to 6.0 percent in the next three years and per capita expenditure on health was targeted to rise from USD 6.00 in 2001 to USD 9.00 in 2004 and thereafter to USD 12.00. There are many health institutions in the country, both public and non-public, which can be used by the Fund to operationalize the Health Insurance Scheme. A number of health insurance schemes have been established in the past few years. These include the National Health Insurance Fund and several private insurance schemes. Experiences from these schemes we believe that would enable the Fund to run its social Health Insurance Benefit scheme (SHIB) more efficiently and effectively. The rate of enrolment of beneficiaries is said to be unsatisfactory, what are the factors influencing the low rate of enrolment of social health insurance beneficiaries. Contribution rate by members is fixed. From its inception in 1998, NSSF has collected 20 per cent of insurable earnings even though this is above the ILO's recommendation of 8 per cent of insurable earnings. The maintenance of the contribution rate at a level higher than necessary seems to have been justified on grounds that the NSSF continues to permit young insured members to withdraw their pension contributions under certain conditions. This is an assurance enough to meet the needs of the insurance scheme for its members. This situation has probably created a public perception that the NSSF is a continuity of the former NPF and that their pension contributions are savings that can still be withdrawn for specific purposes. This appears to be in conflict with the basic objective of a social insurance pension scheme, where in principle all monies collected should be utilized for the explicit purpose of providing lifetime pensions and other benefits according to the enacted legal provisions. The consequences of this approach have been the withdrawal of large parts of the pension contributions available to the young people concerned before retirement, and the payment of lump sums instead of a periodic pension. Both of these relegate young people and other beneficiaries to the ranks of the poorest, once they have exhausted the funds so paid out. But at the same time the evasion of pension contribution is said to be increasing at increasing rate. To be continued..

What are the strategies in promoting formal employment Written by CHRISTIAN GAYA Friday, 25 May 2012 06:01 Better access to social security also requires better access to formal employment. To this end, many social security programmes are now proactively contributing to endeavours to increase employment levels. Of course, an essential objective is also to produce healthier social security receipts while reducing the growth in benefits expenditure. Targeted groups addressed by these measures have included the long-term unemployed, social assistance recipients, first-time job seekers, older workers, and people with incapacities. For beneficiaries this sometimes implies the imposition of additional qualifying conditions for instance, the requirement that non-employed persons must actively seek work or see their benefits suspended. Alternatively, in some other programmes the imposition of conditions has been used to discourage undesirable forms of work, for example, child labour. When taken together, these measures can be summarised as having sought to; reduce work disincentives inherent in the design of some social security schemes refocus social security on improving employability, and change the behaviour of employers, administrators, and service providers to encourage the (re)integration of non-active members of society. Many of the above initiatives primarily address the concerns of more advanced economies. A further necessary task is to address social security’s role in developing country labour markets. Over the last decades social security programmes in developing countries have typically focused their energies on the needs of formal economy workers. For administrative and developmental reasons this was deemed appropriate. But today the policy focus is widening. There are two main reasons for this. First, in most developing countries like East Africa Community member countries, employment in traditional, rural, and non-formal activities continues to predominate. Second, the priorities of many people working in traditional, rural, or non-formal activities often differ from those catered for by conventional social security programmes. In practical terms, low, irregular, and often seasonal income patterns or the lack of a fixed business address penalise potential contributors. Therefore, the challenge for social security is to design programs that more readily address the needs of all. Besides providing temporary employment and promoting skills development through public works programs (e.g. India, South Africa), legislative changes can widen coverage to casual, rural, and self-employed workers under social insurance programs (e.g. India, Iran, Turkey). Other steps include designing public schemes for informal-sector workers (e.g. Tunisia) and promoting community-based micro insurance schemes (e.g. Tanzania, Uganda). And tax-financed benefits in some countries of sub-Saharan Africa, Asia, and Latin America are also targeting those most marginal to formal labour markets. Although the estimated global unemployment rate remains stable at around 6 per cent, the last decade has witnessed the share of the global population of working-age in some form of employment decline by 1.2 percentage points to 61.4 per cent. For policy-makers, declining global employment among two population groups is noteworthy. First, the decline has been most pronounced among younger workers aged 15 to 24. Second, women continue to have fewer employment opportunities than men. The dynamic nature of labour markets necessitates that social security is correspondingly dynamic. One necessary response must be to better anticipate labour market evolution through better tracking global trends, especially demographic and economic trends. Similarly, improvements in producing labour market data are essential. And a change in mind set as well as vocabulary is also needed. If flexible or informal work is the employment reality for an increasing number of people, is the term ‘non-standard employment’ still appropriate? Or should we talk rather of a global jobs crisis? Consequently, as identified by the International Social Security Associations (ISSA) 2007 Research Conference, the following policy questions require prioritized attention: Faced with the expansion of ‘non-standard employment’, how can social security better accommodate requirements for collective and individual responsibility? What future challenges will labour markets present for social security?

What are the strategies in promoting formal employment Written by CHRISTIAN GAYA Friday, 25 May 2012 06:01 Better access to social security also requires better access to formal employment. To this end, many social security programmes are now proactively contributing to endeavours to increase employment levels. Of course, an essential objective is also to produce healthier social security receipts while reducing the growth in benefits expenditure. Targeted groups addressed by these measures have included the long-term unemployed, social assistance recipients, first-time job seekers, older workers, and people with incapacities. For beneficiaries this sometimes implies the imposition of additional qualifying conditions for instance, the requirement that non-employed persons must actively seek work or see their benefits suspended. Alternatively, in some other programmes the imposition of conditions has been used to discourage undesirable forms of work, for example, child labour. When taken together, these measures can be summarised as having sought to; reduce work disincentives inherent in the design of some social security schemes refocus social security on improving employability, and change the behaviour of employers, administrators, and service providers to encourage the (re)integration of non-active members of society. Many of the above initiatives primarily address the concerns of more advanced economies. A further necessary task is to address social security’s role in developing country labour markets. Over the last decades social security programmes in developing countries have typically focused their energies on the needs of formal economy workers. For administrative and developmental reasons this was deemed appropriate. But today the policy focus is widening. There are two main reasons for this. First, in most developing countries like East Africa Community member countries, employment in traditional, rural, and non-formal activities continues to predominate. Second, the priorities of many people working in traditional, rural, or non-formal activities often differ from those catered for by conventional social security programmes. In practical terms, low, irregular, and often seasonal income patterns or the lack of a fixed business address penalise potential contributors. Therefore, the challenge for social security is to design programs that more readily address the needs of all. Besides providing temporary employment and promoting skills development through public works programs (e.g. India, South Africa), legislative changes can widen coverage to casual, rural, and self-employed workers under social insurance programs (e.g. India, Iran, Turkey). Other steps include designing public schemes for informal-sector workers (e.g. Tunisia) and promoting community-based micro insurance schemes (e.g. Tanzania, Uganda). And tax-financed benefits in some countries of sub-Saharan Africa, Asia, and Latin America are also targeting those most marginal to formal labour markets. Although the estimated global unemployment rate remains stable at around 6 per cent, the last decade has witnessed the share of the global population of working-age in some form of employment decline by 1.2 percentage points to 61.4 per cent. For policy-makers, declining global employment among two population groups is noteworthy. First, the decline has been most pronounced among younger workers aged 15 to 24. Second, women continue to have fewer employment opportunities than men. The dynamic nature of labour markets necessitates that social security is correspondingly dynamic. One necessary response must be to better anticipate labour market evolution through better tracking global trends, especially demographic and economic trends. Similarly, improvements in producing labour market data are essential. And a change in mind set as well as vocabulary is also needed. If flexible or informal work is the employment reality for an increasing number of people, is the term ‘non-standard employment’ still appropriate? Or should we talk rather of a global jobs crisis? Consequently, as identified by the International Social Security Associations (ISSA) 2007 Research Conference, the following policy questions require prioritized attention: Faced with the expansion of ‘non-standard employment’, how can social security better accommodate requirements for collective and individual responsibility? What future challenges will labour markets present for social security?

Why understanding lifetime money or retirement plan is important nearly a dozen odds melling pills every day. Of course, he still ate junk food and smoked a pack a day; and his idea of exercise was to give his thumb a workout on the remote control. Shikamoo Mzee had his first heart attack at 52, a bypass at 54, and by 56 he had to quit work entirely. Our Shangazi Idda had a different approach to life. She just wanted to live well. Sometimes she remembered to take a multivitamin, and sometimes she didn’t. But she walked every single day. On sunny afternoons, in steady rains, in nasty sleet, the neighbors would catch sight of Shangazi Idda out for her walk. She ate moderately, she took care of her teeth, and she laughed hard. And right up until she fell ill at the age of 99, she spent her days helping out her neighbors, knitting coverlets for her nieces and nephews, and making exotic jell-o salads for every church gathering. Taking care of your retirement plan isn’t much different from taking care of your health. Just as you can spend all your time worrying about vitamin pills, you can spend every weekend reading about National Social Security Fund (NSSF), Public Service Pensions Fund (PSPF), Local Authority Pensions Fund (LAPF), Public Pensions Fund (PPF), Government Employees Provident Fund (GEPF), Zanzibar Social Security Fund (ZSSF) and changes in the Tanzania Revenue Authority tax code. And, if you make some clever decisions, it may help some. But Shangazi Idda had the real wisdom: The best way to get ready for the future is take care of yourself, each and every day. The surest path to a long and prosperous retirement is to give yourself a secure financial life, day in and day out, starting right now. The key to a secure retirement is to build a sound financial base today. Once you start to think about a lifetime money plan a plan that covers all your financial needs you can see your retirement in a new light. Retirement isn’t some special, distant, different time. Retirement is simply another phase of your life. You may not be working after you retire, but you will go on living. In the same way, you will have less income, but you will go right on paying your bills. And like Shangazi Idda, if you learn good financial habits now, you’ll have plenty of time to laugh hard and enjoy time with your loved ones. You may be thinking, “Getting my financial house in order sounds hard!” We’re not going to fool you if your idea of budgeting is to buy what you want and pray you have enough to cover bit then it may be hard. But we’ve broken it down into five simple steps: you need to balance your basic bills and paying off your debt. On the other hand you should be required to build your emergency savings, but more important you will be needed to pay off your home and at the same time build your retirement savings. These five steps will help you build a strong financial base that will see you through all of your tomorrows before and after you retire.

How to build your lifetime money or retirement plan Written by CHRISTIAN GAYA Friday, 11 May 2012 09:31 How to build your lifetime money or retirement plan First, you need to balance your bills. To build your lifetime money plan, start with what’s most important your basic necessities. These are the “must have” bills those you need to pay month in and month out, no matter what. This includes your rent or mortgage payment, utilities, insurance, car payment, regular medical bills, and any legal obligations (such as student loans). If you pay for daycare so that you can go to work, it goes with your must-have bills. The list also includes a basic food allowance (just the bare essentials. T-bone steaks and restaurant meals don’t qualify as “must-have” bills). Add all these regular expenses up, and call the list your “Monthly Must-Have Expenses.” Generally, you should be able to cover your monthly must-have expenses on 50 percent of your take-home income. That’s right-half your money can go to must-haves. If you keep your must-haves to 50 percent of your income, you will have plenty left over to spend for fun, and enough left over to save for your future. Keeping the must-have expenses in balance will give you a solid foundation for your lifetime money plan. What if you can't manage your bills on 50 percent of your income? Then this is a strong sign that it is time to cut back. Maybe you should send back the rent-to-own television. Maybe it is time to move to a smaller apartment or to trade in the car for something cheaper. Maybe you need to share expenses with a roommate or a family member. Do whatever you can to get your basic expenses down to half of your income. These can be tough choices, but in the long run you'll live happier and rest easier if you start to get your budget straight now. Take a closer look at your expenses with the help of a worksheet What if you just can’t get it to 50 percent right now? Then get as close as you can. If you are spending 65 percent of your income on must-haves, maybe you can bring it down to 55 percent. It’s not perfect, but it would be a big step toward building a more secure future. And once you’ve done your best, set a goal for getting your must-haves into balance. Maybe it will be in a year, once you finish paying off your car. Maybe it will be in two years, once the youngest child starts kindergarten and your daycare bills go down. The point here is to keep your eye on the big picture your long-term financial health. It may take a while until you get everything under control, but every step you take in this direction makes your life better today and tomorrow. Second, pay off the debt. The medical bills from last year’s visit to the emergency room. The money you borrowed from cousin Chris that has been hanging out there for over a year. The credit card balance that has bounced around for more than a decade. You don’t need a scrapbook. Your bills tell your history. Every debt, every monthly payment, every dollar you owe is a claim against your future. Tanzanians from all walks of life are carrying more debt. Kids still in college, married couples with kids, single men and women, rich people and poor people, debt is everywhere. And yet, when most people think about planning for retirement, debt is nowhere in the picture. (And when experts talk about retirement, many seem to assume that no one has any debt.) But the reality is that the over-50 crowd is carrying more debt than ever before in history. They have credit cards and car loans, and many are responsible for student loans they took on to help their children through kindergarten, primary schools, secondary schools and college. The average social security payment is about TZS 600,000 a year not even enough to live safely in many places, let alone comfortably and certainly not enough to cover extra debt payments. And that debt is taking its toll: The elderly are now the fastest growing group in bankruptcy. Debt can be tough on anyone, but hitting your retirement years dragging along a pile of I Owe You (IUOs) is a recipe for disaster. So how do you do it? Getting rid of your debt is a two-part process. The first part is to stop taking on new debt. This is the moment to look yourself in the mirror and say out loud: “No more debt” sawa. If you are ready to get really serious, then it is time to give your credit cards a rest, and stop making new purchases for non-essential items. Once you have made the commitment not to take on any new debt, it is time to start tackling the old debt. We wish there were some magic secrets to quick and painless debt repayment, but there isn’t. Getting out of debt is basically just a matter of paying off your old bills, one at a time, until they’re gone. Start by adding up all your debts the credit cards, doctor bills, past-due bills, everything down to the money you borrowed from your cousin or aunt. Include all your debts except your mortgage, student loans, and car loans. Write them down, whip out the calculator, and add them up. Then start paying them off, one at a time. Meanwhile, keep right on making your minimum monthly payments on the other debts. Once the first debt is paid off, pick another debt, and get that one paid off. Go through your debts one at a time until you are debt-free.

Govt plans to help its senior citizens

Tuesday, 15 February 2011 22:06
By Daniel Msangya,
The Citizen Correspondent

Dodoma. The government is preparing the Social Protection Framework which would help special groups, including senior citizens, benefit from social funds, the Bunge was told here yesterday.

The deputy minister for Health and Social Welfare, Dr Lucy Nkya, told the House that the Tanzania Social Action Fund (Tasaf) and Help Age International have started the process. This would facilitate and make members of the public recognise the needs of old people, she said.

Members of the public would also be shown how to access small tokens through cash transfers to enable old people survive and sustain their lives, he said.

He explained that Help Age International has been operating a pilot project in Karagwe District, Kagera Region. On the other hand, Tasaf is conducting another pilot project in Bahi and Chamwino districts, Dodoma Region, as well as Bagamoyo District in Coast Region, he said.

According to him, the government provides a number of humanitarian services through the Social Welfare Department. These include financial assistance to the poor and old people for making them have an income.

She was answering a question from Prof Kulikoyela Kahigi, (Bukombe-Chadema). The latter had asked the government to explain what plans were set aside to support old people. He said most were so vulnerable and poor to afford their daily needs, including food, clothes and healthcare.

Reacting to another supplementary question from Mr George Simbachawene (Kibakwe – CCM), the deputy minister said special health services had been established in every hospital. He cited Dodoma regional government hospital which had a special desk for the aged.

He said apart from the desk, a special doctor had been reserved to attend the senior citizens.

The Ministry of Labour and Social Security in collaboration with HelpAge International investigated the feasibility of achieving social protection for older people through the implimentation of a universal noncontributory pension.

COMMENTS
The feasibility report found that giving a minimum income to all Tanzanians over over the age of 60 was affordable and implementable by the Government, and would cost around 1% of GDP depending on the level of the transfer.

Furthermore, as well as following in the steps of Southern African countries by implementing an old age grant as the first stage in building social protection system, this would lift 1.5 million people out of poverty and have long term impacts on growth and human development.

For more information on the findings please visit www.pension-watch.net and access the full report here pension-watch.net/.../...
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COMMENTS
The government can not help our senior citizens if they keep financing legislators with billions of money annually.The government have a good money to care old people but our greedy legislators want to feed themselves first before anyone else. We are dead and burried running the country with such greed legislators. Look over how much we pay in salaries and allowances to settle the legislators' free drivers and their night allowance to ride with their bosses? Let the legislators drive their own cars and save money to help our seniors citizens with their medical bills.
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