PRESIDENT John Magufuli yesterday clarified on the government’s decision to merge pension funds in the country, assuring workers that their benefits won’t be affected.
He said the move would also help to avoid forgery and fast track the payment of benefits. “Some pension funds had been using members’ contributions to invest in non-beneficial projects to safeguard their personal interests… this is corruption,” the President said. He said the government decision aimed at having social security schemes that were focused on safeguarding the interests of its members.
President Magufuli stressed that the pension funds should invest in industries which would create employment opportunities and earn the government revenue. He noted, however, that teachers and other stakeholders were still having a chance of airing their views to improve some sections because the bill was still at the early stage.
The President further said that the government had also paid a total of 1.3 trn/- out of 1.5 trn/- owed by social security schemes. In September this year, the government officially announced to merge five pension funds out of the current seven in order to improve services as well as be beneficial to the members.
The Deputy Minister in the Prime Minister’s Office (Policy, Parliamentary Affairs, Labour, Employment and the Disabled), Mr Anthony Mavunde, said that the pension funds would be merged in order to improve services. He said the government had collected views from various stakeholders on how to improve the social security industry. Mr Mavunde said the decision to merge the funds would be endorsed by the Cabinet in the near future.
Last month, a Minister in the Prime Minister’s Office (Policy, Parliamentary affairs, Labour, Employment and Disabled persons) Jenista Mhagama, said the envisaged merger would be undertaken carefully to avoid confusion amongst members. She also said that the government had started reviewing the 2003 social security policy in order to make sure that more people were covered.
“The current policy is very old; we want to make some amendments that would enable us to see various changes in the social security industry, she noted. According to the Social Security Regulatory Authority (SSRA), the country currently has seven social security funds — National Social Security Fund (NSSF), PPF Pension Fund, Public Service Pension Fund (PSPF), Local Authorities Pension Fund (LAPF), Workers’ Compensation Fund (WCF) , Government Employees Provident Fund (GEPF) and National Health Insurance Fund (NHIF), which offer similar benefits.
Stakeholders have been engaged to air their views on the envisaged trimming of social security schemes from the current number to either one or two to reduce the costs of pension benefits and operating costs.