Transcript Adequacy of Current Social Security Benefit

Adequacy of Current Social
Security Benefits
Presented by Kate D.
Bandawe
Deputy Director General
National Social Security
Fund -Tanzania
Agenda
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Background
Social Security Institutions (SSIs) in Tanzania
Benefits offered by SSIs in Tanzania
Adequacy of Current Social Security Benefits
Problems / Challenges
Background
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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
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Focusing on nucleus family
Concentrate on the formal sector
Financed through contributions
Focuses on future risks
Social Security in the United Republic
of Tanzania
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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
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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
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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 …..
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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 …..
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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)
Benefit offered
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Invalidity Pension
Suffering from a permanent disability
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Under the Pensionable Age
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180 contribution credits or at least 36, out of
which 12 are immediate to the date of
invalidity
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Benefit offered
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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
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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
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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
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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.
Benefits Offered
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Health Insurance
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Medical care to an Insured Person, a spouse and up to four
children
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At least 3 month contributions immediately before contingency
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Ceases within three months from the last contribution date
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Retiree may continue enjoying if they contribute 6% of their
monthly pension.
Benefits Offered…
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Healthcare Services
- Out-Patient Services
- In-Patient Services
- Services provided thoroughly
- Accredited Medical providers
- Capitation payment to providers
Adequacy
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Year
Minimum Pensions (in USD) V/S National
Consumers Price Index
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
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The relevancy of the Convention on specific
characteristics prevalent in Africa.
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Extended families v/s nucleus families
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Informal sector v/s formal sector
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Covariance risks like HIV/AIDS, famine, civil wars not
covered
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Immediate needs such as shelter, schooling etc…
Problems / Challenges
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It is apparent that the Social Security Benefits in
Africa and Tanzania in particular are inadequate
due to the following :-
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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.
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