DISCUSSION QN: QN. What are the following; NSSF, LAPF, PPF, and PSPF?

QN. What are the following; NSSF, LAPF, PPF, and PSPF?

1. (A). What are the following; NSSF, LAPF, PPF, and PSPF?

NSSF- (National Social Security Fund) The National Social Security Fund (NSSF) was established by the Act of Parliament No. 28 of 1997 to replace the defunct National Provident Fund (NPF).

NSSF is a compulsory scheme providing a wider range of benefits which are based on internationally accepted standards and it
is a formal institution that provides social security protection in Tanzania, where offers social security coverage to employees of private sector and non-pensionable parastatal and government employees, (http://www.zoomtanzania.com/NSSF--National-Social-Security-Fund).

NSSF, the National Social Security Fund, is national saving scheme mandated by government through the National Social Security Fund act, to provide social security services to employees.

NSSF- (National Social Security Fund) is a formal institution that provides social security protection in Tanzania, it offers social security coverage to employees of private sector and non-pensionable parastatal and government employees (http://www.tanzania.go.tz/pdf/policy%20framework).

LAPF- The Local Authorities Pensions Fund (LAPF) is a social security institution established under The LAPF Act No 9 of 2006 and aiming; To provide a scheme for payment of benefits to insured persons payable under the Act, To work towards a gradual and continuous improvement of benefits payable under the Act, To register employers and employees who by law are required to contribute to the Fund and collect contributions from them, To safeguard members' contributions and other resources of the, Fund through keeping and maintaining up to date accounts and records, To invest members' funds in secure and high yielding investments; and To formulate, offer and administer retirement and other benefits packages which are attractive to persons and institutions who are and may become depositors or contributing employers, http://www.lapftz.org/LAPF2006.pdf .

LAPF this means Local Authority Pension Fund, is the social institution established under LAPF Act number 9 of 2006.

LAPF- (The Local Authorities Provident Fund) is the formal institution offering social security coverage to employees of the Local Government. (http://www.ppftz.org/home/ACT_25_AMEND.pdf)

PPF- (PARASTATAL PENSION FUND) is a social security institution established by Act of Parliament No.14 of 1978 offering social security coverage to employees of the both private and parastatal organizations. The Act was further amended in subsequent years to reflect and accommodate new developments within the social security sector. The main objectives of the Fund is to provide pensions and other related social security benefits to all employees in the Parastatal organizations, private companies, NGO’s, self employed and those in the informal sector, (www.naombakazi.blogspot.com/.../ppf tanzania-jobs-vacancies).

PPF this means Parastatal Pension Fund. Refers to Public fund account under a long term dept scheme of the government.

PPF- (Parastatal Pension Fund) is the formal institution offering social security coverage to employees of the both private and parastatal organizations (http://www.ppftz.org/home/reports/ar1997.PDF).

PSPF (PUBLIC SERVICE PENSIONS FUND) is the formal institution which provides social security protection to employees of central Government whereby deal with providing pension and based on The Act establishing the Fund provides for three categories of benefits: a) Old age retirement, survivorship and invalidity; b) Sickness and funeral; c) Withdraw in respect of Marriage, maternity, emigration and termination of employment, (http://www.pspf-tz.org/en/index.php?page=12).

PSPF this means Public Services Pension Fund, is a darling of all tax saving investments. PSPF- (The Public Service Pension Fund) is the formal institution which provides social security protection to employees of central Government under pensionable terms.

(B). Take one of them and describe in detail.

NSSF (NATIONAL SOCIAL SECURITY FUND).

HISTORY OF NSSF

The National Social Security Fund (NSSF) was established by the Act of Parliament No. 28 of 1997 to replace the defunct National Provident Fund (NPF). NSSF is a compulsory scheme providing a wider range of benefits which are based on internationally accepted standards, (http://www.zoomtanzania.com/NSSF--National-Social-Security-Fund).

NSSF is a leading provider of social security services to employers and employees covered under the following categories: Private Sector, Government Ministries and Departments, Parastatal Organizations, Self-employed or any other employed person not covered by any other scheme and any other category as declared by the Ministry of Labor. Primary objective of NSSF is to provide a wide range of short term and long term benefits to members and families in need of social security in Tanzania. Fund offers Old Age, Invalidity and Survivors Pension, Employment Injury, Social Health Insurance, Maternity and Funeral Grants Benefit services, in Tanzania and international in general.

NSSF COVER ON THE FOLLOWING EMPLOYERS AND EMPLOYEES

Companies such as Non-governmental organizations, Embassies employing Tanzanians International organizations, Organized groups in the informal sector, Government ministries and departments employing non-pensionable employees, Parastatal organizations, and Self-employed or any other employed person not covered by any other scheme Any other category as declared by the Minister of Labour.

SCHEME OF FINANCING

The scheme is financed through contributions at the rate of 20% of employee’s salary. The employer is required to deduct from employee’s gross salary the amount of contribution not exceeding 10% of the employee’s salary. The employer adds the remaining balance to make the required contribution rate of 20 % per month, (http://www.zoomtanzania.com/NSSF--National-Social-Security-Fund).

SCHEME’S BENEFITS

The scheme’s Benefit’s provides seven benefits which are categorized as long term pension or short term benefits as follow; (a) Long Term Pension; Retirement pension, Invalidity pension, and Survivor’s pension. (b) Short Term Benefits; Funeral Grant, Maternity Benefit, Employment injury Benefit, and lastly Health insurance Benefit.

Objectives of the National Social Security Fund

Social security in Tanzania covers a wider variety of public and private measures, meant to provide benefits in the event of the individuals’ earning power permanently ceasing, being interrupted never developing, being unable to avoid poverty, or being exercised only at an acceptable social costs. The major domains of social security are poverty prevention, poverty alleviation, social compensation and income distribution.

Many issues relating to social security are sensitive, as they touch on the material interests of organized workers and the unorganized poor as well as

Insurance industry and employer organizations. The social security system in Tanzania has the following key elements: -

Social assistance schemes which are non-contributory and income-tested, and provided by the state to groups such as people with disabilities, elderly people and unsupported parents and children who are unable to provide for their own minimum needs. In Tanzania social assistance also covers social relief, which is a short term measure to tide people over a particular individual or community crisis such as Mandatory schemes, where people contribute through the employers to pension or provident funds, employers also contribute to these funds, Private savings, where people voluntarily save for retirement, working capital and insure themselves against events such as disability and loss of income and meet other social needs.

Despite the existence of this framework, service delivery has not reached the majority of Tanzanians due to inadequate financing and fragmented institutional arrangements. The estimated total population of Tanzania is 33.5 million1. Out of this, 70 per cent are in the rural areas, while the rest are in urban areas. The total labour force of Tanzania is estimated at 16 million, where 5.4% of the total labour force or 2.7% of the total population is covered by the mandatory formal social security system. 93 per cent of the capable workforce is engaged in the informal sector in both rural and urban areas; out of that 80 per cent is in engaged in the agrarian economy2.

Informal Social Security System

Tanzania, like many other countries in the developing world has had strong informal and traditional social security systems built on family and/or community support. In times of contingencies such as famine, diseases, and old age; individuals have depended on family, clan members and members of the community for assistance in the form of cash or in kind. While it is recognized that over time, traditional social security system has tended to decay and change forms in response to the forces of urbanization and industrialization, there is evidence that in Tanzania family and community social support system have remained as means of social security within different social groups. Overtime, socio-economic reforms have slowly resulted into disintegration of the family-based social security protection leading to the formation of self-help groupings such as UPATU, UMASIDA and VIBINDO.

Challenges gave to the rise of the Social Security.

I) Weakening of Informal Social Protection System

Socio-economic developments taking place in Tanzania have resulted into a slow but steady disintegration of the kinship or family-based social support systems on which the majority of Tanzanians have depended for protection against contingencies. Economic hardships have made it difficult for individuals, families and/or kin members to provide assistance to each other in time of crisis and need.

The high rate of urbanization has also taken its toll on traditional social protection systems. There has been increasing fragmentation with families becoming more dispersed thereby eroding the capacity of extended families to function as social safety nets.

ii) Limited Growth of the Formal Employment

Public sector reforms have resulted into retrenchment of workers, freezing employment in the public sector and privatization of public enterprises. These have led to increased unemployment, which in turn has forced more people to resort to employment in the urban informal sector where earnings are often inadequate and/or uncertain. There is however a limited growth in employment in the private sector.

iii) Reduced Access to Social Services

Despite the deliberate measures by the government to improve provision of social services to the public, considerable part of the population has either limited or no access to services. In some instances, cost sharing in the provision of social services has reduced the capacity of the people to access the services.

iv) Low levels of income

Incomes for the majority of the people in Tanzania are generally inadequate to meet their basic requirements and save for future use.

v) Declaration of Low Insurable Earnings

Some employers provide remunerations composed of basic salaries and allowances, while deductions for social security are based on basic salaries only, leading to lower benefits from social security institutions upon retirement.

Rationale for a Social Security Policy

The existing social security system has many shortcomings that include low coverage of the Tanzanian Society, fragmentation of legislation, lack of regulatory framework, lack of a mechanism for portability of benefits and inadequacy of benefits provided.

Therefore, the need for a well-articulated national social security policy is more eminent now than ever. In view of the foregoing, there is a need for having a comprehensive national social security policy that shall address the needs of employed people in the formal sector, self employed population in the informal sector, the elderly, people with disabilities and children in need of special protection.

Therefore the social security policy is expected to widen the scope and coverage of social security services to all the citizens. Harmonize social security schemes in the country so as to eliminate fragmentation and rationalize contribution rates and benefit structures Reduce poverty through improved quality and quantity of benefits offered. Institute a mechanism for good governance and sustainability of social security institutions through establishment of a regulatory body, Establish a social security structure that is consistent with the ILO standards but with due regard to the socio-economic situation in the country; and Ensure more transparency and involvement of social partners in the decision making with respect to social security institutions.

NSSF IN UGANDA

NSSF, the National Social Security Fund, is a national saving scheme mandated by government through the National Social Security Fund act, to provide social security services to employees in Uganda.

It was established by an act of parliament (1985) to provide for its membership payment of contributions to, and payment of benefits out of the fund.

NSSF is a provident fund (pays out contributions in lump sum). It cover all employees in the private sector include Non-governmental organizations that are not covered by the Governments pension scheme. It is a scheme instituted for the protection of employees against the uncertainties of social and economic life.

The NSSF vision

To be the socio security provider of choice

The NSSF mission

To secure a better life for their growing membership by providing quality products, great customer service and offering competitive returns in a transparent and efficient environment

The NSSF value

(i)Customer centric (ii) innovation (iii) integrity (iv) team work (v) Efficiency

NSSF benefits, as per Act, NSSF administers and pays qualified contributing persons the following benefits as a matter of rights.

1. Age benefits

This is paid to members who have reached the retirement age of 55. Age benefits can also be claimed on attaining the age of 50 provided the claimant has retired from employment.

2. Survivors benefit

This is paid to the immediate surviving family (spouse and children) of the deceased member. In case the member did not have a spouse or children the benefit is paid to the parents if they solely dependent upon the deceased member.

3. Exempted Employment

This is paid to members who join exempted employment categories that have their own schemes example public services, Army, Police etc.

4. Emigration grants

This is paid to foreign or Ugandan members who are leaving country permanently.

5. Invalidity benefit

This is paid to members who can no longer be gainfully employed because of physical or mental incapacitation.

6. With draw benefit

This is paid to a member if he or she attains the age of 50 years and if he or she has not been employed under a contract of services for a period of one year immediately preceding his or her claims.

Generally NSSF is very importance to the people especially its member due to the fact that it help their members who have problem like sick people, Old ages, Disabilities and it make people to live in good standards life after retirements.

LAPF

LAPF, the Local Authorities Pensions Fund established 2006 under the Act number 9 as a social security institution so as to work towards a gradual and continuous improvement of benefits payable under the Act, to register employers and employees who by law are required to contribute to the Fund and collect contributions from them, to safeguard members' contributions and other resources of the fund by keeping and maintaining date accounts and records, to invest members' funds in secure and high yielding investments; and to offer and retirement persons, (http://www.lapftz.org/LAPF2006.pdf)

HISTORY OF LAPF. History of the Local Authorities Pensions Fund (LAPF), The Local Authorities Pensions Fund (LAPF) was established by Act No 9 of 2006 which repealed the Local Authorities Provident Fund Act No 6 of 2000. The difference between the former Local Authorities Provident Fund (LAPF) and The Local Authorities Pension Fund (LAPF) is the way benefits are determined, while in the former provident Scheme the Fund was mandated to Defined Contribution plan, the Fund is mandated to Defined Benefit (DB) plan where it based among contributor retires above poverty line, on the contribution level of the insured person and investment.

OBJECTIVE, the major object of LAPF, was to increase social security towards the citizen who joining on it where employer and employee contributes fund for the future benefits as the growth of the Fund in terms of members to 65,000 in 2006 stems from the fact that majority of LAPF members come from Local Authorities, All employers are mandated by LAPF Act No. 9 of 2006 to register their employees with the Fund. Both employers and employees are required to contribute to the Fund on a monthly basis, which then accumulates to become the workers’ retirement benefits. From 2000, this joint contribution rate stands of development at 20% of an employee’s salary, of which the employer’s share is 15% and 5% is contributed by the employee. LAPF has now been transformed into a DB scheme and come January 2006 it will start paying pension to its 600 qualifying pensioners who were employed by the Local Government Authorities. This scheme clearly shifts the risks from the contributor to the LAPF, so the Fund must have a wide coverage to enjoy the law of large numbers to hedge itself against the relevant risks. http://www.lapftz.org/about/

CHALLENGES, Local Authority Pension Fund faced with various problems such as in scarcity of facilities to store money, low number of members this because there are few people who being aware about the importance of LAPF as well as miss-management of work cause poor performance and efficiency of work, miss uses of fund is another challenge which face the inefficiency of Local Authority Pension Fund. So government must establish good policy and laws so as to guide and modify this institution for more benefited.

PPF

PARASTATAL PENSION FUND (PPF)

PPF is a social security institution established by Act of Parliament No.14 of
1978. The Act was further amended in subsequent years to reflect and
accommodate new developments within the social security sector. The main
objectives of the Fund is to provide pensions and other related social
security benefits to all employees in the Parastatal organizations, private
companies, NGO’s, self employed and those in the informal sector.

PUBLIC SERVICE PENSION FUND (PSPF)

Public Service Pension Fund (PSPF), this was created by an act of parliament (the public retirement benefits acct no.2 of 1999) in order to replace the pension ordinance of 1954.

The management of the fund is under the broad of trustees.

THE AIM OF THE FUND

Is to provide quality services with suitable resources, (http://www.pspf-tz.org/eng.php).

PUBLIC SERVICE PENSIONS FUND (PSPF).

Public Service Pension Fund (PSPF), this was created by an act of parliament (the public retirement benefits acct no.2 of 1999) in order to replace the pension ordinance of 1954.

The management of the fund is under the broad of trustees and the day to day activities are under the director general who is assisted by directors.

The public servise pension fund should adhere the accountability and responsibility, integrity and diligence, creativity as well as courtesy to all.

MEMBERS WHO ARE BENEFIT FROM THIS FUND MAY CATECORIZE INTO THREE;

a) Old age retirement, survivorship and invalidity;

b) Sickness and funeral;

c) Withdraw in respect of Marriage, maternity, emigration and termination of employment.

PENSIONS

The main purpose of Pension is to provide a replacement of income to persons who have permanently lost their income.

OLD AGE PENSION

It is a benefit paid to a member who has attained the age of 55 years of age and the above who’s voluntarily or compulsorily respectively.

SURVIVORS PENSION & INVALIDITY

These services were providing to a member who dies while in the service, the board shall grant to legal representative an amount not exceeding either his annual pensionable.
The benefit is payable to dependants of the deceased member. Dependants include Spouse, children and parents of deceased officer. The survivors pension is payable without prejudice to the relevant laws of inheritance.
The concept of invalidity is based on loss of earning capacity due to inability. The assessment of invalidity will be undertaken by an established Medical Board.

FUNERAL GRANT

This funeral grant shall be paid to family members of the deceased member as condolence.

WITHDRAWAL BENEFITS IN RESPECT OF:

MARRIAGE
Paid to a female member who gets married and consequently gives up gainful employment.

MATERNITY
Paid to a female member who has given birth to a child and has permanently given up gainful employment.

EMIGRATION
Paid to member who is emigrating or has emigrated from United Republic of Tanzania( http://www.pspf-tz.org/en/index.php?page=12).

THE IMPORTANCE OF PUBLIC SERVICE PENSION FUND

This fund may help people to have a good life even though he/she is in hard time like sickness and many other problems. Though through that services people can afford to aquire his or her basic needs.

REFERENCES

http://www.tanzania.go.tz/pdf/policy%20framework/june 04, 2012/19:14hrs

http://www.ppftz.org/home/ACT_25_AMEND.pdf/june 04, 2012/19:31hrs

http://www.ppftz.org/home/reports/ar1997.PDF/june 04, 2012/19:50hrs