New pension regulations prompt strong reaction

Dar es Salaam. The new regulations for pensioners that institute 25 per cent for lump sum payment and 75 per cent monthly packages have provoked another outcry from workers, politicians and trade unionists.

They still demand a clear statement from pension funds on the fate of workers’ contributions in the wake of the new regulations and the mounting government debts owed to pension funds.

The shadow minister responsible for Labour, Ms Ester Bulaya, raised concern about a bleak future for pensioners, citing the new regulations and the government’s accumulated Sh8 trillion debt owed to pension funds.

“We in the the opposition Chadema are against this bad practice of weakening pension funds at the expense of workers’ rights. Our policy calls for stabilising pension funds so that the rights of workers, including pensioners, are protected,” said Ms Bulaya who is the MP for Bunda.

Nzega Urban MP Hussein Bashe said the outcry clearly indicates that the government had not implemented the terms of reference set by the House Committee responsible social services in preparing the new pension regulations.

“I remember we had agreed in one of the Parliamentary meetings that the government would formulate the new pension regulations through tripartite arrangement that involve the government, Association of Tanzania Employers and workers through their trade unions. But I think this was not done,” said Mr Bashe.

He said in the next Parliamentary meeting in January the committee responsible for social services will demand an explanation from the government on how such regulations were formulated.

The General Secretary of Conservation, Hotels, Domestic Social Services and Consultancy Workers Union (Chodawu), Mr Said Mwamba, said Chodawu will give its official position on the matter during the forthcoming central committee meeting of Trade Unions Congress of Tanzania (Tucta).

“We have been against the new pension benefits regulations, but the government have passed them. However, we in trade unions are waiting for the official meetings, including the Central Committee meeting set for the fourth and fifth day of next month,” said Mr Mwamba.

Regarding the debts of Sh8 trillion accumulated by the government, the same meeting will decide on what action to be taken by Tucta, said the Chodawu General Secretary.

Another trade unionist and economist, Mr Oscar Mkude, also expressed concern on the failure of the government to educate workers and trade unions on the time frame and the reasons for instituting the new regulation for paying pensioners a lump sum of 25 per cent, while the remaining 75 per cent to be included in the monthly payments.

The new regulations for pensioners are not unique because they are being practised in other countries like Denmark, Sweden and other Nordic countries, but they make sure that the monthly pay is enough and lasts for life, not for some years. Even some countries in South America like Mexico have similar arrangements, but workers are aware of the regulations,” said Mr Mkude.

Mr Mkude, who is a former economist with the Association of Tanzania Employers, said that there was need to prolong the dialogue so that the workers understand the rationale behind those regulations.

“If the reason is to create a stable environment for operation of pension funds and boost their capacity to generate revenue, then they must be clearly told and engaged,” he said.

He said there was also need for workers to have a say on government borrowing from pension funds.

“During the general meetings of social security funds the workers are sidelined,” said Mr Mkude.

Under the old regulations, pensioners with the National Social Security Funds and PPF pension fund had been receiving 25 per cent in lump sum, while the remaining 75 per cent were set for monthly packages.

However, government workers under the Public Service Pension Fund, Government Employees Pension Fund and Local Government Authority Pension Fund were receiving lump sums of 50 per cent and the remaining 50 per cent were included in the monthly pay.

The country has restructured pension funds from five namely NSSF, GPF, LAPF, PPF and PSPF to two – NSSF and Public Sector Social Security Fund.