Retirees set to earn 5 per cent of delayed benefits, says regulator

Dodoma. Are you worried that it is it taking too long for you to get your social security benefits?

Don’t worry, as the delays may now give you a five per cent extra in your retirement benefits under the new structure.

Social Security Regulatory Authority (SSRA) says the new laws governing the National Social Security Fund (NSSF) and the newly formed Public Sector Social Security Fund (PSSSF) requires each fund to release the retirement benefits in 60 days and failure to do so will attract a five per cent penalty on the part of the organisation.

That is part of the regulatory measures taken to ensure that pension funds become efficient especially after merging the four funds.

The penalty will be charged in the new arrangement in which the PSSSF serves public sector employees and the NSSF is for private sector employees.

SSRA also says that defaulting employers would be taken to court and they would have only two options – either plead guilty as not having submitted employees’ contributions or had done so.

“All these are legal measures to ensure that the remaining two pension funds are effective and the retirees get their retirement benefits on time,” said SSRA’s Legal Services director Onorius Njole yesterday.

“There have been delays in releasing the benefits caused by either the employer or the pension fund and at that time the retirees have been suffering. So, if the fund delays to issue the benefits in 60 days, it will be penalized five per cent of the lamp sum and that will be given to the retiree,” he said.

He was speaking during a seminar to media house representatives to share knowledge on the new social security regulatory environment.

On the sacked government employees due to fake certificate, Mr Njole said the fired officials were not given letters by their employer to allow them claim their benefits.

Drained pension funds?

On shielding the pension funds from draining due to government borrowing thus threatening paymnent of retirement benefits, SSRA’s director general Irene Isaka said it was a worldwide practice for governments to borrow from the pension funds.

“By the way, the government of Tanzania stopped borrowing from the pension funds since 2014 after reaching the limit capped at 10 per cent of the assets of the pension funds,” she said.

She said the pension funds have so far assets valued at Sh12.3 trillion and investments worth Sh11 trillion.

The merging of the pension funds became effective on August 1, 2018 and already the director general and the board of the PSSSF has been appointed.

However, some things were not yet settled and therefore members were required to consult the respective funds, at least for now.

Earlier, the Minister in the Prime Minister’s Office (Policy, Parliament, Labour, Employment and people with Disabilities), Ms Jenista Mhagama, assured that no members of four merged pension funds will lose their benefits including those who contributed under voluntary schemes.

Ms Mhagama said even the employees of the previous funds will just be shifted to the newly formed PSSSF.

The government merged four pension funds - LAPF, PSPF, GEPF and PPF to form the PSSSF.

“All those who were members of the merged funds until the end of July will automatically become members of PSSF including those under voluntary schemes,” said Ms Mhagama.