The Minister of State in the Prime Minister’s Office (Policy, Parliamentary Affairs, Labour, Employment, Youth and the Disabled), Ms Jenista Mhagama speaks in Parliament about the Public Service Social Security Act, 2018 during Bunge session in Dodoma. PHOTO | EDWIN MJWAHUZI
What you need to know:
This is the question that was on Wednesday raised in the National Assembly as MPs debated the Public Service Social Security Bill, 2018.
Dodoma. What would be the role of the Social Security Regulatory Authority (SSRA) when pension funds are merged and down-sized?
This is the question that was on Wednesday raised in the National Assembly as MPs debated the Public Service Social Security Bill, 2018.
The Minister of State in the Prime Minister’s Office (Policy, Parliamentary Affairs, Labour, Employment, Youth and the Disabled), Ms Jenista Mhagama, tabled the Bill in Parliament and said the proposed law sought to merge several pension funds into one.
Funds targeted for merger are PPF Pension Fund, Public Service Pension Fund (PSPF), Local Authorities Pension Fund (LAPF), Workers Compensation Fund and Government Employees Provident Fund (GEPF).
The changes, Ms Mhagama said, would also entail transformation of the National Social Security Fund (NSSF) into an entity that will cater for private sector employees only.
But presenting the views of the Opposition, Ms Esther Bulaya (Chadema-Bunda) queried the future role of SSRA after the merger.
“The official opposition proposes that a process should now be initiated to disband SSRA. Its continued existence means additional costs for the new pension funds because they are required to pay annual contributions to run SSRA.
“This was possible and, indeed, okay when the pension funds were operating independently and competing. We don’t see the need for SSRA because there is an independent board that will be established under the new law where the pension funds can appeal and it allows the attorney general to intervene,’’ Ms Bulaya said.
The chairman of Parliament’s Social Development and Services Committee, Mr Peter Serukamba, said the merger sought to do away with unnecessary competition among many social security funds.
The move would also slash operating costs, he added, noting that Sh235.8 billion in workers’ contributions was spent annually running the institutions.
Mr Serukamba said that the role of SSRA was still relevant because there needed to be an entity that would take care of the benefits of workers and the jobs of those working with the funds that would be disbanded.
Additionally, according to Minister Mhagama, the new law provides for SSRA to continue being the regulatory body for the all pension funds, and ensure that any changes would not in any way affect workers’ contributions and pensions.
She said the changes, in keeping with the regulations of the International Labour Organisation (ILO), would reduce operating costs, arguing that having many of them compromised their ability to offer quality service.
The Bill seeks the establishment of a Public Service Social Security Scheme, which will serve all employees in the public sector.
