The Social Security Regulatory Authority is in final touches to harmonise formulas used in calculating benefits to pensioners, which will be applied by the breadth of social security funds in the country.
SSRA director general Irene Isaka said her office had already conducted a comprehensive actuarial valuation using uniform assumptions for all social security schemes, to come up with a harmonised benefit formula.
“We have worked on the proposed formulae and we’ve already submitted it to the government for final endorsement,” said the SSRA chieftain.
It is projected that if all goes well the formula will start operating in June this year.
The idea behind the formulae is to make the country’s funds adopt similar formulae that will be applicable to all funds.
“We are doing this to create equal playing field for all funds,” the official said, urging funds to ensure that their members are empowered with education on terminal benefits and the entire sector.
She said education is highly needed to clear doubts among members of the funds on a number of issues related to pensions.
About 80 percent of funds held by the various pension funds are invested in government bonds and 20 percent in the construction sector, he stated.
“This is a very serious challenge that needs to be addressed. People need to be well-informed on all these issues,” she suggested.
Rehema Chuma, the NSSF regional manager for government departments and embassies, said that there was need to speed up the process of harmonising terminal benefits for members.
“If this remains unresolved, there are dangers that some funds will lack members as most of them will be rushing to the one with healthier terminal benefits,” she said.
NSSF director general Dr Ramadhani Dau said that the fund was on the right path and will continue to grow to meet expectations.
A three-year strategic plan will be launched soon, envisaged to expand NSSF scope of operations and venturing into new investment that will generate employment opportunities across the country, he added.