The East African (Nairobi)

29 March 2000

Tanzania To Table Bill On Pension Schemes

Dar — es-Salaam - An Amendmhent bill to harmonise the various pension schemes in Tanzania will be be tabled in parliament when it opens on April 4.

A senior official in the National Assembly Clerk's office told The EastAfrican in Dar es Salaam on last week that a miscellaneous amendment, postponed last October would be tabled during the next parliamentary session in Dodoma.

"The bill will be tabled this April but I can't reveal anything at the moment," he said. Another official in the same office, however, said the amendment will deal mainly with harmonising the retirement age at which employees may start drawing old age pension.

Tanzania has three primary pension schemes including the Parastatal Pension Fund (PPF), the National Social Security Fund (NSSF) and the civil service pension.

The PPF is for employees of state-owned firms and companies permitted by the Minister for Finance to enlist with the fund, while the NSSF is for employees in private sector and low cadre government employees. The civil service scheme is for government employees.

The amendment will involve nearly 700,000 employees, mostly in the parastatal and private sectors. Some 270,00 civil servants were covered in a pensions amendment last year, that prolonged their retirement age and raised their minimum pension benefit.

The government has been under pressure from the increasing number of people who are forced to retire and are demanding improved pensions. The government was also forced to change the schemes because it reduced compulsory retirement age for civil servants from 55 years to 60 years.

The enhanced age did not apply to employees in parastatal bodies or the private sector whose compulsory retirement remains at 55 years.

Equally bad was the huge disparity of pensions between the PPF and the NSSF. The latter pays almost three times better than the PPF.

While the PPF pays a minimum of Tsh8,000 ($10) for 12 years, the NSSF pays out a minimum of Tsh23,000 ($28.75) for life, plus several other benefits drawable before and after retirement.

The two pension schemes fall under different ministries with the PPF under Finance and the NSSF under the Ministry of Labour and Youth.

However, Tanzania's trade unions umbrella, the Tanzania Federation of Trade Unions (TFTU), is sceptical that the government will ever table an amendment that raises the benefits of pensioners because it has not been adequately consulted.

TFTU secretary general Bruno Mpangala told The EastAfrican that the government had promised to harmonise pensions in the country last year but there has been little progress.

"As you know there are separate pension schemes for the central government, local government and other pension schemes. We had hoped that the government would make the schemes uniform because they are all contributory, but they need to be improved. The years at which a pensioner starts drawing benefits differ," Mr. Mpangala said.

"Although the government had said it would table a bill to harmonise pensions, it had not done so up to now," he added.

Mr. Mpangala also said that the amendments to be tabled in the next parliamentary session were not expected to touch on the pension rates paid under the different schemes.

The NSSF public relations and promotions manager, Mr. Frank Maduga, told The EastAfrican that the NSSF had already submitted its views on the harmonisation of pensions to the Ministry of Labour and Youth Development.

"We gave our views and recommendations in writing to the government in November last year," Mr. Maduga said adding that the NSSF had also given its views in a debate co-ordinated by Economic and Social Research Foundation late last year. Other stakeholders including Parastatal Pension Fund (PPF) and civil servants also attended the debate, he said.

Mr. Maduga said the NSSF, whose membership stands at 400,000, benefit from seven active schemes including invalidity, funeral grant, old age, survival benefits, injury at work, maternity and medical care benefits.

The PPF on the other hand services a few thousand members from 82 non-parastatal firms.

Publication date: March 27 - April 2, 2000

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