The government has started to repay loans which it owes the Public Service Pensions Fund (PSPF), the Social Security Regulatory Authority (SSRA) has said.
According to SSRA public relations officer Sarah Kibonde the
government started paying monthly contributions of its workers since
November, last year.
She said in a statement issued yesterday in Dar es Salaam that so
far PSPF had received a total of 101.94bn/- as monthly contributions
from the government .
She said according to a PSPF letter dated 11.2.2016, the Fund had
already issued a total of 2284 cheques worth Sh54.99 billion to its
pensioners
The statement further said the government had injected Sh2.6
trillion into PSFP as a non-cash bond with a 6.5 annual interest rate.
It said : “The non-cash bond is expected to mature at different
times to enable the social security fund to meet its demand, including
paying benefits. Times for non-cash bonds to mature differ from year to
year, including those which mature in three to 10 years.
Stock market experts say the new bonds will be a boon to the
nascent sector in the country. According to the CEO of Zan Securities,
Raphael Masumbuko, non-cash bonds were bonds usually issued by
governments to institutions as settlement of debts it owes them.
He was quoted by this paper as saying that the bonds are issued
when a government does not have enough cash or doesn’t want to give
immediate cash.
He also said that the new securities will improve the liquidity of
the secondary market (stock exchange) if floated by changing hands.
“The bonds are important to the recipients because they can decide
to discount them in the market if they need immediate cash or they can
wait until maturity,” Masumbuko said.
The actuarial assessment conducted by the International Labour
Organisation (WHO) indicated the National Social Security Fund (NSSF)
and PPF Pension Fund (PPF) could remain stable up to 2085 and 2075,
respectively.
While the life span of Local Authority Pension Fund (LAPF) and
Government Employees Pension Fund (GEPF), is estimated to reach beyond
2058 and 2047 respectively.
If there is a serious review of the criteria applied in calculation
of benefits, then these social security funds are bound to reach 2085,”
it said.
The statement explained that the lifespan after retirement has
gone up to 20.8 to male pensioners and 22.2 to female pensioners and
that in 50 years to come, it is likely to go up 22.9 to male pensioners
and 24.9 to female pensioners.
“The pension rate has been improved to 72.5 per cent from the average of 67 per cent in previous years,” it said.
The statement said the government has agreed to clear all debts to
all social security funds including National Health Insurance Fund
(NHIF), GEPF, LAPF, NSSF and PPF.
It added that NSSF had paid its beneficiaries, who had withdrawn
from the fund, by 85 per cent, further saying that SSRA plans to
introduce unemployment insurance benefits to meet the challenge of those
who still withdraw from the fund.
“The insurance will be helping the people who become jobless to
sustain themselves while looking for job,” the statement observed.
It further said that SSRA has started to prepare regulations to
trim down operational costs to the social security funds and that the
funds would not be allowed to spend over 10 per cent as operational
costs by July this year.
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