TUCTA hedges on sacking of pensions funds regulator

30Dec 2018
By Guardian Reporter
Dar es Salaam
Guardian On Sunday
TUCTA hedges on sacking of pensions funds regulator

TRADE Union Congress of Tanzania (TUCTA) President Tumaini Nyamhokya has distanced himself from public comments following the decision by President John Magufuli to sack pension funds regulatory authority chief Irene Isaka on Friday.

Social Security Regulatory Authority (SSRA) Director Irene Isaka was dismissed on Friday evening shortly after a meeting convened by President Magufuli involving trade union leaders and other stakeholders in government and the private sector to discuss public clamour against a new formula to regulate retirees’ lump sum and monthly pension.

At the meeting, President Magufuli revoked application of the new formula and reinstated former formulas used by former pension funds before their merger last year.

He said the use of old formulas would go on until 2023 when a mutually agreed one would most probably have been found.
However, when reached for comment yesterday on the president’s decision to terminate the services of SSRA DG Isaka, the TUCTA president said his union had no mandate over the president’s decision.

“The president’s decision to fire the SSRA director general is not within our mandate. He is the appointing authority and he can make any decision which he deems to be in the country’s best interest,” he said.

Nyamhokya said his union only deals with the welfare of employees who are members of their associations when their rights are violated.

“Though we are not happy about her sacking, there is nothing we can possibly do about it because we cannot intervene. It is not within our capacity to do that,” he said.

He said the president had simply changed her duties and she would be assigned other duties in due course.

On Friday, the president reinstated the 50 per cent lump sum payment formula for payment of lump sum until 2023 when the transition period expires.

The president’s decision came in the wake of a public outcry over the newly established formula forcing pensioners to receive 25 per cent of their lump sum and the remaining 75 per cent to be paid on a monthly basis as salary.

Under the old regulation which the president directed to be used, pensioners with the National Social Security Fund (NSSF) and PPF Pensions Fund had been receiving 25 per cent in lump sum, while the remaining 75 per cent was set aside as pension.

However, government workers under the Public Service Pension Fund, Government Employees Pension Fund and Local Government Authorities Pension Fund were receiving a 50 per cent lump sum while the remaining 50 per cent was included in their monthly pension.

The new formula raised public clamour by workers in the country led by their trade unions.

Workers demanded a clear statement from pension funds regulator on the fate of their contributions in the wake of the new formula in the backdrop of mounting government debts owed to pension funds.

While addressing trade union leaders, pension funds executives and employers at State House on Friday, the president directed the previous withdrawal formulas to continue being used during the transitional period until 2023 when a new formula mutually arrived at would start being used.

He said the new 25 per cent payment denied workers their right to use what they had persevered in saving.
Tanzania restructured pension funds from five, namely NSSF, GPF, LAPF, PPF and PSPF to only two.