SSRA refutes debt claim
Social Security Regulatory Authority director Irene Isaka speaks to journalists during a press conference in Dar es Salaam yesterday. She is flanked by acting director of Research and Policy Joseph Mutashubilwa. PHOTO | SAID KHAMIS
What you need to know:
. Members of social security funds raised their concerns about the government decision to review Social security funds regulation.
. Under the new formula, pensioners will henceforth receive 25 per cent of their savings in lump sum, while the remaining 75 per cent will be paid in monthly instalments contrary to previously, when members of some pension funds received 50 per of their servings in lump sum while the remaining were paid in monthly instalment
. But SSRA says the move isn’t aimed at covering funds, which were misused through implementation of projects
Dar es Salaam. The Social Security Regulatory Authority (SSRA) denied yesterday that the decision to harmonise payment of retirement benefits was due to huge debts the government owes social security funds.
Addressing the media in Dar es Salaam, SSRA director general Irene Isaka said the government has not borrowed from social security funds since 2013 after reaching its borrowing cap, which stands at 10 per cent of members’ total savings.
She was responding to the suggestion that the government introduced the new retirement benefits formula in response to gross misuse of funds spent on various projects.
Under the new formula, pensioners will henceforth receive 25 per cent of their savings in lump sum, while the remaining 75 per cent will be paid in monthly instalments.
Under the old arrangement, members of the Government Employees Pension Fund (GEPF), Local Authority Pension Fund and Public Services Pension Fund (PSPF) were receiving 50 per cent of their retirement benefits in lump sum and the remainder in monthly packages.
“It’s not true that the new regulations were introduced to cover up for funds that were allegedly misused. The regulations were introduced in order to minimise operational costs and create equality among members of all pension funds,” Ms Isaka said. “As far as we are concerned the government’s debt owed to social security funds still stands because we haven’t received any document indicating that its has been cleared.”
However, Ms Isaka said the government hasn’t borrowed from social security funds since 2013 after reaching the ceiling.
“As per regulations, the government isn’t allowed to borrow more than ten per cent of members’ savings, and this limit was reached back in 2013,” she said.
However, Ms Isaka added that the government through its institutions such as ministries could still borrow from pension funds for implementation of development projects.
The Controller and Auditor General’s latest report shows that the government and its various institutions and agencies owe pension funds a total of Sh8 trillion.
According to the report, the government and its entities have a tendency to borrow from pension funds without bothering to pay the debts.
The report specifically mentions the National Social Security Fund (NSSF), Tanzania Revenue Authority (TRA), Tanzania Ports Authority (TPA) and National Identification Authority (Nida) as some of the public institutions whose financial records were tainted by questionable transactions or failure to execute their mandates professionally.
Ms Ester Bulaya, the Shadow Minister of State in the Prime Minister’s Office responsible for Labour, Employment, Youth and the Disabled, last week spoke at length about the decision to revise the formula governing the payment of retirees’ benefits and the future of pensioners in general.
“We in the opposition Chadema are against this bad practice of weakening pension funds at the expense of workers’ rights. Our policy calls for stabilising pension funds so that the rights of workers, including pensioners, are protected,” said Ms Bulaya, who is the MP for Bunda. Nzega Urban MP Hussein Bashe said the outcry that greeted the new regulations indicates the advice of Parliament’s Social Services Committee had been disregarded.
“I remember we agreed that the new pension regulations should be formulated under a tripartite arrangement the government, the Association of Tanzania Employers and workers through their trade unions. I don’t think this was done as agreed,” the CCM lawmaker said.
