PRESIDENT Samia Suluhu Hassan has directed Prime Minister Kassim Majaliwa, to effectively deal with employers who default on paying their workers' contributions, stressing that illegal acts were denying people's rights.
Such contributions range from workers' pensions, health insurance, union fees among others.
Dr Samia issued the directive during May Day commemorations held on Monday, at national level at the Jamhuri Stadium in Morogoro Region. She said that the problem was quite huge in the past.
"A total of 14,516 claims were received and 13,523 claims (equivalent to 93 per cent) have already been settled...Prime Minister Kassim Majaliwa will work on the few remaining claims," she noted, stressing that employers must clear all the contributions.
As the Premier vowed to summon a meeting with employers after the event, the President also emphasised on the need for public institutions to meet their obligation considering the government was supplying them with funds which among other things should service the employees' contributions.
Elaborating on the National Health Insurance Fund (NHIF) claims, she stressed that service providers should be paid within 60 days as per the requirement of the law.
"If the employers had not settled outstanding claims, within 60 days, they should pay NHIF for people to benefit with the services," she noted.
Last year, Parliament endorsed a flat rate of 33 per cent pension formula of workers' total savings in lump sum payment upon retirement that brings equity among pensioners from the private and public sector.
The formula sees retired workers pocketing a lump sum of 33 per cent of their total contributions and the remaining 67 being reserved for monthly pension payment.
Minister of State in the Prime Minister's Office (Labour, Youths and People with Disability) Prof Joyce Ndalichako had told the National Assembly that the new rates apply to both private and public sectors.
She said under the previous arrangement, some of the pensioners were receiving higher lump sums than what they contributed, while others were receiving less compared to their contributions.
"Some of the effects that were brought by the previous arrangements of the 50 per cent lump sum, there were some contributors who pocketed 129m/- after contributing 36m/- in 467 months," she said.
"But there are others whose contributions were amounting to 86m/- in 350 months but ended up getting a lump sum of 54m/- under the arrangement of 25 per cent pension formula," added the minister.
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She said this caused inequality among pensioners and that the just introduced flat rate aims at ending the differences.
"This rate has put all pensioners in one arrangement that is guided by the Employment and Labour Law of Tanzania," explained the minister, saying the new formula enables the pension funds to operate equally.
According to her, with the new formula, retirees who contributed 86m/- will be able to get a lump sum of 71m/- while their monthly pension will be 1.84m/-.
She said the decision to come up with the new rate was reached by the committee whose members among others are from the government, Association of Tanzania Employers (ATE) and Trade Union Council of Tanzania (TUCTA).
The increment was among the earmarked changes in the social security funds new regulations, which will come into effect on July 1st 2022 and is an increase from the previous 25 per cent.
The new arrangement also allows amendment of Section 25A of the Social Security Benefit Schemes Regulations recently announced by the government.
Following outcries from different parties in 2018, the government constituted a team of experts to review the old regulation and come up with proposals on how to amicably improve pension services and ensure survival of the funds.
The committee was guided by a number of issues, mainly being to ensure new regulations provide better pension benefits to retirees and to ensure the pension funds remain sustainable and of benefit to all members.
