THE Parliamentary Parastatal Organisations Accounts Committee, (POAC) has cautioned social security funds over hurriedly concluded construction contracts, some of which have ended up in disputes which could have been avoided in the first place.
Speaking in Dar es Salaam at the on-going Parliamentary Standing Committee sessions, POAC Chairman, Zitto Kabwe said that in most cases social security funds have done a commendable job, but caution should be exercised to stay away from unnecessary confrontation.
The chairman was addressing officials from the Local Authority Pension Fund (LAPF), who appeared before the legislators and shared information with regards to the performance of the security fund.
Clarifying on the kind of misunderstandings so far experienced, the chairman gave an example of the Local Government Training College of Hombolo in Dodoma, whereby payment for renovation and expansion work, done by one of the social security funds at a cost of 34bn/-, sparked arguments perhaps due to ambiguity in the agreement with the government.
Currently, Tanzania has six social security funds namely; the National Social Security Fund (NSSF), Parastatal Pensions Fund (PPF), Government Employees Pension Fund (GEPF), Public Sector Pension Fund (PSPF); Local Authority Pension Fund (LAPF) and Zanzibar Social Security Fund (ZSSF).
In the recent past, allegations have been levelled against some of the funds accused of investing in unviable projects, lending to non-members and taking overly long to disburse members' benefits. In other instances, it was claimed that a large chunk of social security members' money is invested in unviable real estate projects.
However, experts from within said that real estate, for example, hardly takes up 10 per cent of all investments and a bigger chunk of the money goes to the government securities and similar risk-less investment opportunities. The other accusation is that currently, investment decisions are made haphazardly and without the consent of members.
On the contrary, they are made by boards of trustees with representatives from the government, employees and employers. "Some of the investments are socially viable providing high returns and still improve the public's welfare.
For example, the construction of the mega University of Dodoma, the building of the new Bunge House and the planned construction of the Dar es Salaam-Chalinze Road, among others," explained one of the social security funds officials.
He added, "All these add not only to the funds' wealth but also improve the welfare of the entire Tanzanian society. With regard to members' pensions, the funds are trying hard to swim against the strong tide of inflation," he said.
However, social security funds are set to execute their duties more efficiently after enactment of a new law, the Social Security (Regulatory Authority) Act 2008. This seeks to supervise and regulate the functions of all social security schemes in the country.