Tanzania plans overhaul of social security funds

Dar es Salaam- Tanzania (PANA) -- The government of Tanzania plans a major overhaul of social security institutions in the country to make them operate with a transparency that is responsive to the needs of beneficiaries.
The envisaged policy changes include the gradual phasing out of huge investments in huge buildings that take away a large chunk of the contributors' premium with meagre returns, a senior government official told PANA Monday.
"We have formed a task force to work on a comprehensive policy that will guide the day-to-day operations of the social security organisations in line with requirements of the International Labour Organisation (ILO)," Tanzania's labour minister Juma Kapuya said.
Two key social security institutions in Tanzania--the Parastatal Pension Fund (PPF) and the National Social Security Fund (NSSF)--are under severe criticism from economic experts for investing customers' money into real estates without the contributors being consulted or represented in the decision- making process.
The critics charge that administrators of the funds have the penchant to focus on investing in huge buildings, which they say are costly and less rewarding to beneficiaries compared with putting the money in treasury bonds or the stock market.
Worse still, the critics claim that the social security agencies are being run in a secretive manner as key policy decisions are taken unilaterally at ministerial level without involving the stakeholders.
"It is out of this crazy arrangement that we decided to change the existing policy governing operations of social security institutions to make them transparent and responsive to the needs and aspirations of their stakeholders," Kapuya said.
Stakeholders--the employers, employees and corporate persons --should be informed of how the money they contribute is being used and what returns they should expect, he added.
The Trade Union Congress of Tanzania (TUCTA), too, has been critical about the way social security schemes are being administered in the country.
The organisation says the current system of running the funds denies workers of their rights to decide where the money should be invested.
"We believe involvement of pensioners in the running of the funds would remove suspicions and fears that the money they contribute is being wasted on none paying projects," TUCTA chairperson Margreth Sitta says.
The new policy to guide the funds is expected to be ready by the end of this year, the minister said.

20 august 2001 12:19:00

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