Adequacy of Current Social Security Benefits

1. Adequacy of Current Social Security Benefits Presented by Kate D. Bandawe Deputy Director General National Social Security Fund -Tanzania

2. Agenda • Background • Social Security Institutions (SSIs) in Tanzania • Benefits offered by SSIs in Tanzania • Adequacy of Current Social Security Benefits • Problems / Challenges

3. 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

4. Main Characteristics of Benefits Offered by SSI • Focusing on nucleus family • Concentrate on the formal sector • Financed through contributions • Focuses on future risks

5. 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

6. 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)

7. The profile of Social Security Institutions in Tanzania

8. A Model of Social Security Industry in Tanzania

9. 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

10. 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)

11. 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)

12. Benefit offered • 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

13. 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

14. 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

15. 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)

16. 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.

17. 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.

18. Benefits Offered • 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.

19. Benefits Offered… • Healthcare Services - Out-Patient Services - In-Patient Services - Services provided thoroughly - Accredited Medical providers - Capitation payment to providers

20. Adequacy • Minimum Pensions (in USD) V/S National Consumers Price Index

21. 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…

22. 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.

23. Thank You