By Felix Andrew
The government of Tanzania has 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
This was said in a Parliament today by the Deputy Minister in the Prime Minister’s Office (Policy, Parliamentary affairs, labour, employment and disabled) Anthony Mavunde, when responding to a question poised by Busega legislator Raphael Chegeni (CCM).
The MP had wanted the government to come up with a statement as to when all the pension funds would be merged.
Reacting, Deputy Minister Mavunde said that five pension funds will be merged in order to improve services.
However, he did not mention names of the funds to be merged but said already the government had collected views from various stakeholders on how to improve social security industry in Tanzania.
Deputy Minister Mavunde said the decision to merge the funds would be endorsed by the cabinet in the near future.
According to the Social Security Regulatory Authority (SSRA), currently the country 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.
For sometimes, stakeholders have been engaged to air their views on envisaged reduction in number of the social schemes from the current number to either one or two to reduce the costs of pension benefits and operating costs.
Among other recommendations, stakeholders have for sometimes now been proposing that the funds should be merged to form either one or two funds---one for public sector and the other for private sector. The experts argue that costs to operate social security funds are higher except with the Public Sector Pension Fund.
According to SSRA Director General Irene Isaka only the PSPF had low operating costs compared to the others. The high cost of running the other funds is ruining their ability to offer quality services, prompting the SSRA to prepare guidelines to reduce their operating costs.
As of July last year, the funds were directed to spend no more than 10 per cent of their values -- down from 15 per cent