The Social Security Regulatory Authority (SSRA) is seeking greater empowerment so as to fulfil its statutory obligations, with stakeholders saying it will have a hard time moving on without adequate support.
Speaking to this paper in random interviews, some social security stakeholders said the agency is charged with a wide range of heavy responsibilities but, so far, there is too little support going its way.
“The authority has a lot of duties, the major ones including streamlining the operations of social security funds and protecting and safeguarding the interests of members of those funds,” said one of the stakeholders, Ally Mtani.
“It is therefore clear that it cannot perform its activities to satisfaction without support from the government, the funds and other quarters,” he added.
Mtani said, with conditions as difficult as they are, it was important for the National Assembly “to consider speeding up the proposed review of law governing the authority in order to make more independent and efficient”.
The law stipulates that funds for SSRA’s operations shall consist of money appropriated by parliament, registration fees received from the managers and custodians of social security schemes and any other money it will legally acquire for the execution of its functions.
SSRA has reliably requested the government to allow it to effect a slew of changes aimed at further empowering it, these including introducing a 0.4 per cent levy to be paid by all pension or social security schemes in the country.
SSRA Director General Irene Isaka said when contacted for comment on the matter yesterday that they need to have “more reliable and sustainable sources of funding if we are to meet our strategic objectives and execute our functions to satisfaction”.
“Our one year of operations has made us better realise the crucial importance of having a reliable source of funding,” she noted, adding: “This is due to the fact that there are a number of important activities we need to undertake in partial fulfilment of our statutory obligations and in order to implement reforms effectively.
DG Isaka gave some of the activities as actuarial valuations, portfolio reviews, public awareness and educational campaigns on social security, capacity building to key players in the social security sector, and the development of ICT infrastructure to enable social security schemes to work effectively and efficiently enough.
She also pointed out that, as a member of the International Organisation of Pension Supervisors (IOPS), SSRA is required to adhere to the principle of operational independence.
Asked on the possibility of the authority diverting the money collected in the form of levy, she said that was “simply impossible as there are many watchdogs”.
She said SSRA is guided by a strategic plan, an annual plan and an annual budget approved by a Board of Directors and forwarded to the respective ministry for approval. Other controls include the Internal Audit Department and the Office of the Controller and Auditor General (CAG), as stipulated in the SSRA Act.
The recommended amendments to the law state that the amount will be regulated by the relevant minister, who will therefore review the rate relative to the growth in membership of the pension funds and scale it down in the future as appropriate.
This paper has established that charging of the annual levy is practised in many countries, in some based on membership of the particular social security schemes, in others by deduct some amount from the schemes’ total income and in yet others by deducting it from the schemes’ net asset value.
Countries where the levy is charged include Australia, Austria, Belgium, Bulgaria, Chile, Czech Republic, Finland, Germany, Hong Kong, Israel, Jamaica, Kenya, Luxembourg, Mexico, Namibia, The Netherlands, Poland, Republic of Korea, South Africa, Spain, Thailand and the UK.
Pension funds in South Africa pay statutory levies to the South Africa Financial Service Board plus an additional amount of per social security fund member. Pension funds registered as umbrella scheme pay an additional levy in respect of each participating employer.
Public agencies similar to SSRA that already charge levy include the Tanzania Communication Regulatory Authority (TCRA) and the Energy and Water Utilities Regulatory Authority (Ewura).
SSRA was established under the social security regulatory Authority Act No. 8 of 2008, part of its mandate being the regulation of the social security sector.