The performance of all pension funds in terms of assets, membership and contributions for the year 2011/12 has been impressive, the Social Security Regulatory Authority (SSRA) has said.
A press statement issued by the regulatory agency in Dar es Salaam yesterday indicates that the social security schemes’ total assets increased from 4.4trn/- in 2011 to 5.6trn/- this year, an equivalent of 27 percent growth.
The report draws from audited accounts for 2011 and provisional figures for this year, according the authority.
The schemes’ net assets went up from 4.1trn/- in 2011 to 5.2trn/- currently, representing an increase of 29 per cent, the statement said.
Members increased from 1.5 million in 2011 to 1.7 million this year, equivalent to 13 per cent growth. They included National Health Insurance Fund members.
Members’ contributions have grown from 1.2trn/- in 2011 to 1.4trn/- in 2012, indicating a growth of 16.6 per cent, the statement said, while benefits payments rose from 575bn/- in 2011 to 724bn/- this year, representing a growth of 26 per cent.
The number of pensioners almost doubled from 43,000 in 2010 to 72,000 pensioners this year. This was equivalent to 67 per cent growth or an average growth of 34 per cent per annum.
The statement said the scheme with the highest number of pensioners is the Public Sector Pension Fund (PSPF) followed by PPF.
It added that PSPF has younger pensioners compared to the rest of the schemes, while NSSF is leading in terms of older pensioners.
However, the average age of members is 41.3 years, it said, meaning that the system is approaching maturity, calling for fresh injection of members.
The authority said social security coverage remains narrow with more concentration on the formal sector, while the informal sector is the country’s major employer.
“We are challenged to come up with products and services that will entice the informal sector to join as new members of the schemes,” the statement said.
According to the statement some funds have started to recruit members from the informal sector including food vendors, farmers, bajaj, taxi and motorcycle operators under the Supplementary Scheme’s arrangement.
Under this arrangement, scheme members are allowed to borrow up to 50 per cent of their contributions for investing into their chosen ventures.
“The challenge ahead of us is to ensure that members access some kinds of benefits while they are still working,” the SSRA statement said.
The funds’ investments, the statement said, increased from 3,539bn/- in 2011 to 4,251bn/- in 2012 representing a growth of 20 per cent.
“Looking at the investment portfolio, one would see that it is schewed towards fixed income assets and relatively smaller amount in equities and properties,” it added.
“This can be attributed to the limited avenues for investment due to low development of financial markets — total return of investment was 15 per cent in 2012,” it noted.