Treasury permanent secretary Emmanuel Tutuba and PSSSF director general Hosea Kashimba signed the new accord where the government initiated the payment through a non-cash bond for 2.17trn/- stretched out between eight and 25 years.
In remarks after the signing, Tutuba said the move follows the president’s directive for the matter to be solved. The process to repay the long term debt observed due process and was finally approved, he stated.
The PS noted that the social security sector is important for the development welfare of retirees and the society at large since through the fund, retirees get monthly pension to help them survive.
Through investments conducted by PSSSF, many Tanzanians have obtained access to employment, thus able to earn a living. The government decided to start repaying the vast amounts to help improve the lives of beneficiaries, many of whom have served the country diligently, he asserted.
Records show that PSSS is paying around 60bn/- per month in pensions to beneficiaries, which means that the fund is injecting that amount into the economy in a regular manner, he stated.
Discussions with PSSSF on repayment of the debt focused especially on pre 1999 liabilities, where the pensions system was restructured and debts of older funds shifted to new entities instead of the Treasury.
“After thorough analysis and due to the importance of the fund, the government decided to pay the debts, starting with initial payment of 2.17trn/- on non-cash bond taking eight to 25 years,” he explained.
That debt comprises amount accrued since PSPF (Public Sector Pensions Fund) was set up in 1999 and started disbursing benefits in 2004. Payments were made in accordance to being employment, before July 1999 and subsequently.
“This simply means that a retiree in 2004, employed in 1970 was paid full benefits for the entire period including the pre-fund period. The government remains committed to working closely with PSSSF by helping solve challenges facing it,” he elaborated, noting that the government has paid 500bn/- out of the 724bn/- debt that has been approved, and is continuing to pay the remaining amount.
Director Kashimba thanked President Samia Suluhu Hassan for the decision to repay the debt, saying it will strengthen the fund as it pays retirees their benefits on 25th of every month and is dedicated to serving them rightly.
“At PSSSF we believe that implementation of the agreement will relieve from pre-1999 liabilities and enable it to perform the duty of paying benefits to beneficiaries,” he stated.
That agreement means that the fund will be getting at least 120bn/- per year, where the management will ensure the amount is properly utilized and increase liquidity, he added.