PSSF: Government has cleared a chunk of its debt

The amount is part of Sh4.6 trillion in outstanding contributions for members to the PSPF since its establishment in 1999.

PSPF, along with PPF Pension Fund, Local Authorities Pension Fund (LAPF) and Government Employees Provident Fund (GEPF) were then merged in 2028 to form what is now known as PSSSF.

“On behalf of the board of trustee for the PSSSF, I thank President Samia Suluhu Hassan for deciding to pay this money through a Sh2.17 trillion bond,” Mr Kasimba said, detailing how the money has partly helped the fund to cater to all its obligations and still remain with enough liquidity.

The Sh2.67 trillion also includes Sh500 billion which the government has paid as part of a Sh731.4 billion debt that it [the government] took to implement several projects.

“The projects include the construction of the new Parliament building, the Hombolo Government College, the Nelson Mandela Institute of Science and Technology, and the University of Dodoma,” he said.

He said the money, loaned to the government, was beneficial to both sides because apart from aiding the construction of amenities that aid the delivery of social services, it has all the same been profitable to the PSSSF.

“We used to hear that the government has taken pension funds’ money and injected the same in execution of development projects. That was not the same but the fact is that the government borrowed money from us and we only issued the money after realizing that it was profitable to beneficial to our members,” Mr Kashimba said.

He said out of the Sh731.4 billion, the principal loan was just slightly above Sh400 billion and that the remaining among was what the fund earned as interest from the loan.

Since its establishment in 2018, PSSSF has seen its value by 27.76 percent from Sh5.83 trillion to Sh8.07 trillion.

“In the first two years, the fund has paid 10,273 member claims valued at Sh1.03 trillion from all the consolidated funds. In total, we have so far paid 262, 095 members’ claims valued at Sh8.88 trillion,” he said.

Since its establishment, PSSSF has been able to achieve financial success due to well-planned investment strategies in various areas.

 One is increasing investments in various sectors amounting to Sh7.92 trillion, from the previous Sh6.4 trillion a surge of 23.5 percent.

“The fund’s investment in the government bonds amounts to 60 percent of its total investment portfolio while another 15 percent has been invested in the real estate. The occupancy rate in its residential buildings currently stands at 72 percent for office buildings and the expectation is to reach 80 percent by the end of this fiscal year,” Mr Kashimba said.

The fund has also invested 12 percent in company stocks, with seven percent in bank deposits and six percent has been distributed to other sectors.

 Mr Kishimba said among other things they were planning to improve the use of digital solutions in their operations by 100 percent come June 2024, while the current level of integration is 90 percent.

“As per the strategic plan, we expect the Fund's value to be more than Sh10 trillion,” Mr Kashimba said.

 He added that the fund planned on entering into contracts with employers who had arrears, including inherited contributions, many of them being councils, thereby affecting the timely payment of benefits.

“Currently, 78 contracts have been signed out of 184 councils; we expect that by September 30, 2023, all contracts will have been signed,” he said.

"Continuing to reduce the time it takes to pay benefits from the current sixty days to no more than 30 days as specified in our Strategic Plan,” said Kashimba.