THE government is set to liberalize the social security sector and will in October, this year, appoint director general of the newly-formed Social Security Regulatory Authority. Among other things, the director general will spearhead expansion of the private pension and social fund services nationwide. According to the Minister for Labour, Employment and Youth Development, Professor Juma Kapuya, (pictured) the government is still keen and committed to the sectors liberalisation, to ensure that the funds reached all the people.
He pointed out in a recent interview with the Daily News that the regulator would also be responsible for opening up the social security funds market opportunities to the private sector.
The new authoritys chief executive officer would ensure that the necessary modalities are put in place in line with the Social Security Regulatory Act of 2008. Under the Act, private companies will be able to apply and venture into private pension and social security fund operations. More details will be available after the appointment of the DG.
Prof Kapuya added that the DG would also ensure that both the existing pension and social security funds and the new entrants extend their coverage countrywide. The new regulatory authority will monitor and supervise the recruitment of new private firms.
It would further ensure that the funds operate professionally in tandem with the socio-economic changes taking place in the country. Prof Kapuya further told this newspaper that the regulators will also look into the best way of dealing with members transfers from one pension fund to another.
The regulatory body will also help the pension funds to operate more efficiently and ensure that investments are made in the best interests of its members, who are the main beneficiaries of their respective schemes.
Commenting on the move, the Director General of Government Employees Pension Fund (GEPF), Mr David Msangi, said private investors in the sector were welcome, but should only supplement the operations of the available funds. Mr Msangi said because of the risks associated with the funds activities, such businesses should be closely supervised by the government.
On the criticisms that the funds have never involved their members on drawing the type of investments to undertake, Mr Msangi said the contract between a fund and its member is based on calculated benefits.
He, however, said that members had representation in the funds boards where they can air their views on how best to improve the services. Meanwhile, the Confederation of Tanzania Industries (CTI) has said that the pension and social security schemes should be liberalised, if Tanzanians are to benefit from its operations.
The Second Vice-Chairperson of the Confederation of Tanzania Industries (CTI), Mr Jayesh Shah, told the ‘Daily News’ that the liberalisation of the sub-sector, currently dominated by government entities, would create competition and bring about more efficiency in service provision.
The funds currently operating in the country include National Social Security Fund (NSSF), Parastatal Pension Fund (PPF), Government Employees Pension Fund (GEPF), Public Sector Pension Fund (PSPF) and Local Authority Pension Fund (LAPF). In recent years, clients have been complaining that the funds have been misusing members money by investing in projects or lending to non-members, while it takes long for members to get paid their benefits.
Daily News
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