Government Employee Provident Fund (GEPF)

Table of Contents

1.0 Introduction

2.0 Year of Establishment and its Act

3.0 Vision and Mission of Government Employee Provident Fund (GEPF)

3.1 Vision of Government Employee Provident Fund (GEPF)

3.2 Mission of Government Employee Provident Fund (GEPF)

4.0 Core Values

5.0 Objective and Functions

5.1 Objective

5.2 Functions

6.0 Organization Structure

7.0 Target Group

8.0 Entry Condition of Government Employee Provident Fund (GEPF)

9.0 Members Modalities of Contribution

10.0 Duration of Being Pensionable

11.0 Types of Benefit and its Time of Offering

11.1Retirement Benefit

11.2 Resignation Benefit

11.3 Death Benefit

11.4 Funeral Benefit

12.0 Coverage and Success

12.1 Coverage

12.2 Success

13.0 Advantage, Challenges and way forward

13.1 Advantage

13.2 Challenges

13.3 Way Forward

14.0 Conclusion 

Introduction

 Government Employee Provident Fund is a social security fund providing social security protection to its members using provident system approaches.  Currently the fund has two schemes namely compulsory scheme (CS) and voluntary scheme (VSRS).  The fund pays its members retirement benefits and death gratuity as a lump sum benefits includes interest accruing to members’ accounts on six months basis.  Voluntary schemes members are allowed part withdraw of their serving after contribution of six months.  This provision allows members to finance some of their essential needs while still members to the fund, (www.mpakasi.com)

Government employee’s provident fund is a scheme providing social security to employment of the government who are in operational services and who under contact, was established in 2002 under provident fund act No 51 of 2002 (RE 2002).

Vision

To be a leading Professional Provident Fund in Tanzania in terms of widest coverage and customer oriented services.

Mission

To provide quality and timely social security benefits under Provident Fund System to non- pension, contractual employees and self employed person in Tanzania through the use of modern information communication technology.

Core Values

Government Employees Provident Fund have the following core values Accountability, Transparency, Behave like owner, Result oriented, Excellence, Integrity

Objective

·        To increase benefits to its members by though investing in government securities, commercial banks, and by providing loans.

·        Improving services to members for example they see their contribution through mobile phones.

·        Online membership enrollments and making their contributions through mobile phones. Payments.

·        Reducing duration of payment benefits from the current seven days to below seven days. 

Functions

·        Provision of education and enrollment to new members

·        Collection of contribution from members

·        Investment of members contribution

·        Payment benefits to its members soon after the end of contract.

 

 Target group

Public Sector employees Civil Servants, Private Sector employees, Self-Employed, Self-Employed, agriculture, Self-Employed, non-agriculture, Military/police 

Entry conditions (membership criteria)

All people who are employed by contact without regarding the sector where they come like industries, government, mining, Non-governmental organization and international organization   

Member’s modalities of contribution

Every employee is liable to pay 10% of his salary as monthly contribution while every employer is liable to pay 15% of the employee’s salary as monthly contribution in respect of that employee.

Duration of being pensionable

Government Employees Provident Fund provides pensionable after retirement of the employees or after end of the contract or resignation or death.

Types of benefits and its time of offering

i)                   Retirement benefit

GEPF provides for normal, early and late retirement, as well as retirement for medical (ill health) reasons. Explained as following

Normal retirement 60 years is the normal retirement age for GEPF members. The benefits paid depend on whether a member has less than 10 years’ pensionable service, or 10 or more years of pensionable service. Members with less than 10 years’ service receive a gratuity (a once-off cash lump sum) that is equal to their actuarial interest in the Fund. Members with 10 or more years’ service receive a gratuity and a monthly pension (annuity).

Early retirement Under certain circumstances, members may retire early, meaning before reaching the normal retirement age of 60. Again, the member’s years of pensionable service determine the benefits. Members with 10 or more years of service receive annuities and gratuities. These are calculated in the same way as for normal retirement, but with a reduction of a third of one percent (0, 33%) for each month between the dates of early retirement and normal retirement.

Ill health and other retirements Enhanced benefits are paid when members retire for medical reasons, when injured on duty, or when their posts are abolished through organizational restructuring. In these circumstances, members receive both annuities and gratuities. For members with less than 10 years’ pensionable service, benefits are based on an increased period of service and calculated as a percentage of the member’s final salary. Members with more than 10 years’ service are also paid an annual supplementary amount.

ii)                Resignation benefits

These benefits apply to members who resign or are discharged due to misconduct or an illness or injury caused by the member’s own doing. These members have two options: either they can be paid a gratuity (a once-off cash lump sum) or have their benefits transferred to an approved retirement fund. If benefits are being transferred, GEPF pays the member’s actuarial interest to the member’s new fund. The amount that is transferred to an approved retirement fund is not taxed at this point, tax is only deducted when the member retires or withdraws cash from the new fund.

iii)              Death benefits

Death benefits are paid when a member dies while in service, or within five years of becoming a pensioner. GEPF also pays annuities to the surviving spouse(s) or orphan(s) of members who die while in service or after retiring.

Death while in service, the benefit paid is based on the member’s period of pensionable service. It is payable to the surviving spouse or beneficiaries or, if there are no beneficiaries, to the member’s estate.

Death after becoming a pensioner, retirement or discharge annuities are guaranteed for five years after a member goes on pension. If the member dies within this period, his or her beneficiaries receive the balance of the five-year annuity payments (excluding the annual supplement) in a once-off cash lump sum.

Spouse’s annuity, a spouse or eligible life partner is entitled to a percentage of the annuity paid to the member at date of death. The same applies if the member dies while in service and had a full potential service period of at least 10 years (meaning pensionable service years plus unexpired years until normal retirement).

Orphan’s annuity, GEPF pays annuities to the orphans of members who became pensioners when a member dies in service with a potential service period of 10 years or more. These annuities are only paid when a member’s spouse dies.

iv)              Funeral benefit

The purpose of funeral benefits is to help pay the funeral costs when a member or pensioner passes away. Funeral benefits are also paid out on the death of the spouse, life partner or eligible child of a member or pensioner. Wherever possible, GEPF will process a funeral benefit claim within 72 hours of receipt; however, payment can be delayed if the claim form or the documentation accompanying a claim is incomplete or incorrect. In order to allow GEPF to process the claim quickly and efficiently, the claimant must ensure that the information provided is complete and correct.

Coverage

The Fund covers all people who are employed by contact without regarding the sector where they come for example in industries, government, mining, Non-governmental organization and international organization.   

Success

Fund has recorded an impressive performance not only in growth of number of members, but also in terms of contributions and investment income collected. As a result in 2012 the Fund‘s assets has increased by 30.7% compared to the previous year 2010/2011.

Advantage

Simple to get information, the most important to join in GEPF is because of uncomplicated to get information about the security scheme and its profit, for instance in 2012 three strategies were implemented to increase the number of members joining the Fund namely increasing awareness through mixed communication approach, efficient service delivery through adherence to the Client Service Charter and opening of regional offices to move services closer to the members. In the same year GEPF joined a realm of social media to reach out to a larger and broad range of members both formal and informal. For example the members are able to get information after six months.

 Good benefit provided, One of the main important of the Fund is to provide good benefits to its member for instance terminal benefit, dismissal, retirement, funeral, and medical benefit. 

Partial withdrawal Taking into account members growing social needs the Fund allows partial withdrawal in the form of loans to its members to allow them to prepare for their life after work, such withdrawals are provided without interest rate and members are required to repay through monthly salary. 

Contributions Rate The Fund have simple contribution rate compared with other Funds in Tanzania because members able to contribute from 5% or 10% depending to its agreement, through that gives chance to everyone from both informal and formal sector to join.      

Safety, the Fund invests in areas with minimum risk because the investment is guided by Investment Policy to ensure all investments are made in areas with optimum returns. The Fund investment including government securities, fixed deposit with commercial banks, corporate bonds, listed shares at the DSM stock exchange, loans and real estates. 

Challenges facing the fund

Low coverage to the informal sector, the Fund are not successful coverage to the informal sector even if it allow them to join, this is because most of them are ignorance even if the Fund do for the level best to make awareness to the community through media and seminars but people who are informal sector a few in number to join.

High competition of the Funds, in Tanzania there are so many Funds that contribute to more competition because most of them share the same benefit and compete to get new members.

Lack of public information on the important role of social security, there is a lack of awareness of the people in rural areas about the benefits provided by the Fund, Rural people who have no access of the media like Television and Radio there are not always aware about GEPF and its function.  

Way forward

Improves operational effectiveness and efficiency, the Fund should advance the operation through enhanced processes, systems and facility upgrades which are helping to improve the overall effectiveness of GEPF, the Fund should undertake measures to further improve quality of its services to members. For example the GEPF should take measure to ensure the organizational wide training with emphasis on skills development and improves staff working conditions through provision of working facilities and improving staff remuneration.

Improving adequacy of the level of benefits provided by the Fund. Even if the Fund have the levels of benefit provided such as retirement, funeral, medical, and education benefit but this level should improve for the benefits of its members through opening agents in region and district that could help member to get benefit near to the living place for example funeral benefits.

To increase investments the Fund should increase investment in order to make the Fund to be stable for example in instead of investing only in Government project, Fixed deposits, Loan, Emerging Markets so the Fund must extend their investments in other areas such as buildings, infrastructures, mining, in social services such as in education, and health for the aims of expand the Fund in order to earn more profit.

Conclusion

Generally the Government Employees Provident Fund is very important to all Tanzanian citizens to join without regarding this people a working informal sector or formal sectors, because of good services and benefit provided to its members before and after death for example medical, retirement, dismissal, and funeral benefit. Not only that the Fund improve awareness concerning with management and member is able to get information about is fund from different source, for instance the member is able to get information through direct contact like office visitation, phone communication and social media like twitter and face book, also through website.

  

REFERENCES

www.gepf.or.tz/index2.php?lang=en, retrieved on 26^th April, 2014, 1130am

www.gov.za/aboutgovt/contacts/detail, retrieved on 26^th April, 2014, 1137am

www.gepf.or.tz/, retrieved on 26^th April, 2014, 12:42am.

www.mpakasi.com, retrieved on 26^th April, 2014, 12:57am.

Written by Ausi R. Chiwambo (June, 2014)

Tefilo Kisanji University

chiwambo@hotmail.com

     0753110740