Post on 02-Feb-2016
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Adequacy of Current Social Security Benefits
Presented by Kate D. BandaweDeputy Director GeneralNational Social Security Fund -Tanzania
Agenda
Background Social Security Institutions (SSIs) in
Tanzania Benefits offered by SSIs in Tanzania Adequacy of Current Social Security Benefits Problems / Challenges
Background
ILO Convention 102 of 1952:- Benefits are contract between insured and SSI
Short term benefits:-• Medical care• Sickness• Unemployment • Employment injury• Maternity• Family assistance
Long term benefits:-• Old age• Invalidity• survivorship
Main Characteristics of Benefits Offered by SSI
Focusing on nucleus family Concentrate on the formal sector Financed through contributions Focuses on future risks
Social Security in the United Republic of Tanzania
Tanzania has a population of about 35.4 million people
About 16 million represent capable labour force (adult aged 15-60 years)
Slightly over 1 million are in formal employment, out of these about 776,000 persons are covered by social security schemes equivalent to 4.85% of the whole labour force
15 million labour force not covered by the formal social security protection
Social Security Institutions in Tanzania
National Social Security Fund (NSSF) Parastatal Pension Fund (PPF) Public Sector Pension Fund (PSPF) Local Government Provident Fund (LAPF) National Health Insurance Fund (NHIF) Government Employees Provident Fund
(GEPF) and, Zanzibar Social Security Fund (ZSSF)
The profile of Social Security Institutions in Tanzania
Name Year Coverage Membership Contributions
Rate(%) Eas Ers
NSSF 1964 Private 400,000 20 10 10
PPF 1978 Parastatal and private
60,000 20 5 15
LAPF 1944 Local Govt 40,000 20 5 16
NHIF 2000 Goverment 275,000 6 3 3
GEPF 1942 Police and prisons
15,000 25 10 15
PSPF 1999 Central Govt 215,000 20 5 15
ZSSF 1998 Govt and private
46,000 15 5 10
A Model of Social Security Industry in Tanzania
Benefit offered by National Social Security Fund - NSSF
NSSF offers 7 out of 9 contingencies of ILO standards:- Old Age Pension Survivor Pension Invalidity Pension Maternity Funeral Grant Health Care Benefits Employment Injury
Benefit offered …..
Old Age Pension:- Attainment of Pensionable age (55-60yrs) 180 Pension Credits (15 years) Late age entrants recognized by accepting
lesser number of pension credits Benefits Payable:- Monthly pension (MP) Initial lump sum (MP x 24)
Benefit payable …..
Special lump sum for non qualifiers – average Last years contributions x total numbers of pension credits.
Pension = 30% up to 67.5% of Average monthly earnings (AIME)
Minimum pension = 80% of statutory minimum wage (SMW)
Invalidity Pension Suffering from a permanent disability
Under the Pensionable Age
180 contribution credits or at least 36, out of which 12 are immediate to the date of invalidity
Benefit offered
Benefit offered
Survivors Pension Death of an insured person Legal dependants left behind Member had qualified for monthly pension Benefit payable:- Monthly pension calculated as in retirement benefit Divided at 60% (children and 40% Spouse (S) or
100% to parents
Benefits offered
Benefits Payable 2 years pension for a spouse less than 45
years and is not taking care of a disabled/minor child (<15 years)
12 month lump sum if the deceased member had started drawing pension
Special lump sum for deceased member who had not qualified for pension
Benefits Offered
Funeral Grant Reimbursement for burial expenses incurred
• Conditions: Members made at least 1 contribution Burial expenses been incurred Claim submitted within 60 days.
• Benefits Payable: Determined by the Board from time to time Depending on contribution levels ($75 to $300)
Benefits Offered
Maternity Benefits Member is in a state of expected confinement Made at least 36 contributions, 12 of which are
immediate to the date of confinement. Every 3 years unless the child dies within 12 months.
Benefits Payable: Cash benefits at 100% of Average Insurable Daily
Earnings (AIDE) for 12 weeks Medical care for pregnancy related diseases Services cover a period from 24th week to 48 hours
after delivery.
Benefits Offered
Employment Injury Benefits Sustained injury or occupational diseases at the
workplace
- 50% of AIDE up to 26th week of incapacity. - 60% of AIDE for up to 7 years for permanent
Disability. - Provision of artificial limbs - Death benefits to survival same as permanent
disability.
Health Insurance
Medical care to an Insured Person, a spouse and up to four children
At least 3 month contributions immediately before contingency
Ceases within three months from the last contribution date
Retiree may continue enjoying if they contribute 6% of their monthly pension.
Benefits Offered
Healthcare Services
- Out-Patient Services
- In-Patient Services
- Services provided thoroughly
- Accredited Medical providers
- Capitation payment to providers
Benefits Offered…
Adequacy Minimum Pensions (in USD) V/S National
Consumers Price Index
Year Name of SSI Exchange Rate (Tshs/USD)
National Consumer Price Index
NSSF PPF PSPF
2002 24.51 15.32 21.45 979.11 101.0
2003 22.87 14.29 20.01 1,049.58 104.5
2004 30.16 13.62 19.07 1,100.92 108.9
2005 29.10 18.41 18.41 1,140.95 113.6
Adequacy The relevancy of the Convention on specific
characteristics prevalent in Africa.
Extended families v/s nucleus families
Informal sector v/s formal sector
Covariance risks like HIV/AIDS, famine, civil wars not covered
Immediate needs such as shelter, schooling etc…
Problems / Challenges It is apparent that the Social Security Benefits in
Africa and Tanzania in particular are inadequate due to the following :-
Benefits offered are not relevant to Africa Covariance risks like HIV/AIDS, famine, Civil wars
are not covered Immediate needs not given the requisite priority Benefits are too small to meet the basic needs Short-term benefits cease after retirement Maintaining the value of benefits against inflation.