Retirees have welcomed last week’s cabinet decision to increase monthly pension payouts.
A presidential order determining new pension and occupational hazards benefits, which officials said could be published in the official gazette in a couple of days, offers varied increases to various categories of retirees, with the highest increase (150 per cent) going to the retirees who earn the least, between Rwf5,200 and Rwf10,000 a month.
Once the new rates have come into force, retirees who currently receive Rwf5200 and Rwf10,000 a month will get Rwf13,000 and Rwf25,000, respectively.
Those who get between Rwf10,000 and Rwf20,000 will receive a 75 per cent increase, with the highest payout in this category increasing to Rwf35,000.
The category that received the slightest adjustment – a 0.35 per cent increase – is for pensioners that receive at least Rwf1.5 million. These will see an increase of Rwf5250 on their monthly payment.
“We welcome the fact that Government has responded to our request positively,” the president of Rwanda Pensioners’ Association (ARR), Modest Munyuzangabo, told The New Times.
Some of the monthly payments could not even buy a sack of charcoal, he added.
He, however, added that while the least paid pensioners have received the most increases, their new payouts are still considerably below the minimum package proposed by AAR.
“We had proposed that the minimum payout should be at least Rwf25,000,” he said. “Nonetheless, we still welcome the adjustments; at least it will help with a few basic needs.”
The New Times understands that some 1000 retirees have been receiving Rwf5200 a month.
The Rwanda Pensioners’ Association had for about a decade now pushed for pension increases, arguing that the cost of living had since increased manyfold.
For instance, a kilogramme of beans, which was about Rwf30 twenty years ago, goes for about Rwf500 today.
The Director-General of Rwanda Social Security Board (RSSB), Jonathan Gatera, explained that in deciding the new increases a number of things were considered, including equity and sustainability of the pension scheme.
“We hope the official gazette laying out the new payouts will be published within a week,” he said.
Gatera said the increases deliberately put emphasis on retirees who earn the least.
“The idea was to base on the solidarity principle to help improve the living conditions of those at the base of the pyramid,” he said.
The decision to increase pension was first adopted during the 2013 National Dialogue Council (Umushyikirano).
The chairperson and spokesperson of Rwanda Civil Society Platform, Jean Léonard Sekanyange, told this newspaper that the increase of benefits was a good step forward toward improving retirees’ welfare.
“The idea of pension scheme is to ensure that one still affords decent life even in retirement,” he said.
He said retirees’ pension benefits should be revised periodically based on the changing market dynamics.
Some of the pensioners have been receiving the same amount since 1996.
Munyuzangabo said that because of the peanuts that many retirees receive in monthly benefits they couldn’t afford to mobilise resources to venture into income generating activities or other self-help initiatives like a savings and credit cooperative.
As at end June 2017, the pension scheme had 446,409 contributors and paid pension to 17,378 retirees, according to the National Bank of Rwanda.
Total pension sector assets increased to Rwf661.3 billion in June 2017 up from Rwf584 billion in June 2016.
Between June 2016 and June 2017, total contribution to the pension fund grew by 4 per cent, to Rwf77.5 billion up from Rwf74.5 billion.
The rise in contributions is related to the number of contributing employees, which went up from 396,632 in June 2016 to 446,409 in June 2017.
Total payouts rose by 12 per cent from Rwf15.8 billion in June 2016 to Rwf17.7 billion in June 2017, mainly due to the increased number of pension beneficiaries which rose from 32,363 to 33,532, according to the central bank.