JPM seals merger of pension funds into just two … for all workers

PRESIDENT John Magufuli has already signed into law the Public Service Social Security Act, 2018 which seeks to merge all the pension funds into just two major entities, the Deputy Speaker of the National Assembly, Dr Tulia Ackson, said yesterday.

Under this move the entire workforce would be served by the Public Service Social Security Fund (PSSSF) and the National Social Security Fund (NSSF), which would now cater for the public and private sectors.

The Deputy Speaker told lawmakers that the Head of State had also endorsed the Written Laws Miscellaneous Amendment Act, 2018 – which effectively endorse the Public Service Social Security Act, and establishment of the Fund; the Public Service Social Security Scheme, would now serve all employees in the public service sector, taking in all employees in other pension funds.

After publishing the regulations for implementation of the new law, the monies of the former Funds shall, with effect from the date of commencement of this Act, be transferred to the newly established PSSSF.

The Bill further directs the transfer of workers in the private sector as well as voluntary contributors to the National Social Security Fund (NSSF). According to SSRA, currently there are five social security funds in the country, with almost similar benefits. They are the National Social Security Fund (NSSF), PPF Pension Fund, Public Service Pension Fund (PSPF), Local Authorities Pension Fund (LAPF), and Government Employees Provident Fund (GEPF).

Several consultations were made when crafting the new law, with stakeholders proposing the merging of the funds into either one or two entities to reduce operational costs.

The International Labour Organisation (ILO) once advised the government to merge the pension funds into one or two entities to reduce the costs of pension benefits and operating costs, arguing that having many of them reduces their ability to offer quality services