THE COMPETITIVENESS OF SOCIAL SECURITY SCHEMES IN
TANZANIA MAINLAND
KITANDU PAULO UGULA
A DISSERTATION SUBMITTED IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR DEGREE OF MASTER OF HUMAN RESOURCES
MANAGEMENT OF THE OPEN UNIVERSITY OF TANZANIA
2013
ii
CERTIFICATION
The undersigned certify that has read and hereby recommends and approve for
acceptance by the Open University of Tanzania a dissertation paper titled: The
Competitiveness of Social Security Schemes in Tanzania Mainland, in partial
fulfillment for the Master of Human Resources Management degree of the Open
University of Tanzania.
………………………………………………
Dr. Jacqueline L. Bundala
(Supervisor)
……………………………………….
Date
iii
COPYRIGHT
No part of this dissertation work may be reproduced, stored in any retrieval system,
or transmitted in any form or by any means electronic, mechanical, photocopying,
recording or otherwise without prior written permission of the author or Open
University of Tanzania in that behalf.
iv
DECLARATION
I, Kitandu Paulo Ugula, do declare that this dissertation has been written by me.
Unless otherwise mentioned, I personally collected and analysed all used research
materials. I also declare that this dissertation, which has been supervised by Dr J. L.
Bundala, has never been presented for any academic or non-academic award
anywhere before this submission.
……………………….………….
Signature
……………………………….
Date
v
DEDICATION
This dissertation work is dedicated to my family.
vi
ACKNOWLEDGEMENTS
The writing of this dissertation, and indeed successful attendance to this masters
degree programme, has been made possible through generous support, materially or
otherwise, from a number of individuals. I take this opportunity to acknowledge such
assistance and inspiration.
Special thanks go to my supervisor, Dr. Jacqueline L. Bundala, for her professional
guidance, encouragement and understanding throughout the entire process of
producing this dissertation.
I wish to recognise the contributions from other
members of staff at the Faculty of business Management of the Open University of
Tanzania, during the whole this master’s programme, and especially Mr Kalanje
and Dr Chacha Matoka, who ensured that most of the guidance I requested from
them was given to me. I also appreciate for the fruitful discussions I shared with Dr
Richard K. A. Towett on issues relating to research writing. The discussions
equipped me very well on research methodology issues.
I would like to thank various people who have helped me in gathering relevant data
and information to enable me write this dissertation. These people include my fellow
employees at the Fair Competition Commission, as they belong to different social
security schemes and has given me very useful information. I thank the staffs of the
social security schemes I visited and all members of those schemes I was lack to
have chances of talking with them.
Lastly, I express my heartfelt thanks to my beloved mother Elida Materu Ugula, my
wife Elizabeth Godfrey Ugula, my children and all family members for their
vii
throughout encouragement of my academic career. Of the most important I thank the
Almighty God for keeping me in good health and thus I was capable to write this
dissertation work.
viii
ABSTRACT
For the purpose of enhancing the government’s core objective of social protection,
Tanzania prepared a Social Security Policy in the year 2003. Adhering to the Policy
in the year 2008, the Government of Tanzania enacted the Social Security
(Regulatory Authority) Act. Among others the Act provides that every employer in
the formal sector shall be required to register his employees with any of the
mandatory schemes, provided that it shall be the right of the employee to choose a
mandatory scheme under which the employee shall be registered. This provision
provides some flexibility to employees to choose the scheme suiting them thus
creating a ground of competition among the schemes. This study has established that
beside the availability of the Social Security Policy, the establishment of the Social
Security Regulatory Authority and the existence of the social security laws, the
Tanzanian social security schemes are competitive to each other though there are
factors which are attached to each social security scheme to be distinguished to the
other. The study has established that factors like the legal framework governing the
social security schemes, their operations, the ways these social security schemes
promote and protect the interests of their members and their sensitisation activities
play major roles in their competitiveness.
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TABLE OF CONTENT
CERTIFICATION .....................................................................................................ii
COPYRIGHT ............................................................................................................iii
DECLARATION....................................................................................................... iv
DEDICATION............................................................................................................ v
ACKNOWLEDGEMENTS ..................................................................................... vi
ABSTRACT .............................................................................................................viii
LIST OF TABLES………………...……………………………………………….xv
LIST OF ABREVIATIONS ..................................................................................xvii
CHAPTER ONE ........................................................................................................ 1
1.0 INTRODUCTION................................................................................................ 1
1.1 Background ............................................................................................................ 1
1.1.1
Social Security Progress at International Context ......................................... 3
1.1.1.2 United States of America ............................................................................... 6
1.1.1.3 Kenya ........................................................................................................... 10
1.1.1.3.1 Kenyan Retirement Benefits Legislation .................................................... 10
1.1.1.3.2 The National Hospital Insurance Fund Act................................................. 11
1.1.1.3.3 The National Social Security Fund Act ...................................................... 12
1.1.1.3.4 The Pensions Act ........................................................................................ 13
1.1.2 Tanzanian Context on Social Security Progress ............................................... 14
1.1.2.1 The Recognition of Social Security ............................................................... 14
1.1.2.2 The Social Regulatory Authority ................................................................... 18
1.1.1.3 The Tanzanian Social Security Schemes ....................................................... 19
x
1.2
Statement of the Research Problem ............................................................... 22
1.3
Research Objectives ....................................................................................... 23
1.3.1
Main objective of the Study ........................................................................... 23
1.3.2
Specific Objectives ........................................................................................ 23
1.4
Research Questions ........................................................................................ 24
1.5
The Significance of the Study ........................................................................ 24
CHAPTER TWO ..................................................................................................... 26
2.0 LITERATURE REVIEW ................................................................................. 26
CHAPTER THREE ................................................................................................. 32
3.0 MATERIALS AND METHODS ...................................................................... 32
3.1
Research Design ............................................................................................... 32
3.2
Area of the Study ............................................................................................. 32
3.3
Sample Size of the Study ................................................................................. 32
3.4
Tools and Techniques of Data Collection ........................................................ 33
3.5
Data Analysis and Interpretation...................................................................... 33
3.6 Data Reliability and Data Validity ....................................................................... 34
CHAPTER FOUR .................................................................................................... 36
4.0 FINDINGS AND DISCUSSIONS ..................................................................... 36
4.1 What is the Best Legal Framework Established for Governing Social Security
Schemes in Tanzania? ...................................................................................... 36
4.1.1 Constitutionality of the Schemes ..................................................................... 36
4.1.2 The Provisions of Law with Regard to Benefits Obtainable in the
Schemes ........................................................................................................... 43
4.1.3 Available Mechanisms and Remedies for Redressing Members ..................... 45
xi
4.2
How do the Six Social Security Schemes Operate in Tanzania Mainland ...... 48
4.2.1 Customer Care ................................................................................................. 49
4.2.2 Decentralisation ............................................................................................... 50
4.2.3 Processes and Procedures of Effecting Members’ Benefits............................. 52
4.2.4 The use of New Information and Communication Technology ...................... 54
4.3
How do these schemes promote and protect the interests of their members ... 55
4.4
What are Social Security Schemes Doing to Sensitise People on the Functions
of Social Security in Tanzania ....................................................................... 60
4.5
Discussions of Findings Related to Each Scheme’ Competitiveness .............. 62
4.5.1 The Social Security Schemes Current Profiles in a Nutshell ........................... 62
4.5.2 Public Service Pension Fund ........................................................................... 64
4.5.2.1 The Legal Framework Governing the Scheme .............................................. 64
4.5.2.2 Operations ...................................................................................................... 66
4.5.2.3 Promotion and Protection of Members Interests ........................................... 71
4.5.2.4 Sensitisation Activities................................................................................... 72
4.5.3 Parastatal Pension Fund .................................................................................. 73
4.5.3.1 The legal framework Governing the Scheme ................................................ 73
4.5.3.3 Promotion and Protection of Members Interests ........................................... 79
4.5.3.4 Sensitisation Activities................................................................................... 81
4.5.4 National Social Security Fund ......................................................................... 82
4.5.4.1 The legal framework Governing the Scheme ................................................ 82
4.5.4.2 Operations ...................................................................................................... 85
4.5.4.3 Promotion and Protection of Members Interests ........................................... 89
4.5.4.4 Sensitisation Activities................................................................................... 91
xii
4.5.5 Government Employees Pension Fund ............................................................ 92
4.5.5.1 The legal Framework Governing the Scheme.............................................. 92
4.5.5.2 Operations .................................................................................................... 95
4.5.5.4 Sensitisation Activities............................................................................... 100
4.5.6
Local Authorities Pensions Fund ............................................................... 101
4.5.6.1 The Legal Framework Governing the Scheme .......................................... 101
4.5.6.2 Operations .................................................................................................. 103
4.5.6.3 Promotion and Protection of Members Interests ....................................... 106
4.5.6.4 Sensitisation Activities............................................................................... 108
4.5.7
National Health Insurance Fund ................................................................ 108
4.5.7.1 The Legal Framework Governing the Scheme .......................................... 108
4.5.7.2 Operations .................................................................................................. 111
4.5.7.3 Promotion and Protection of Members Interest ......................................... 115
4.5.7.4 Sensitisation Activities............................................................................... 117
4.6
Discussion of Findings .............................................................................. 117
4.6.1
The Best Legal Framework for Governing Social Security Schemes in
Tanzania ................................................................................................... 117
4.6.2
The operation of the six schemes in Tanzania Mainland ........................... 118
4.6.3
Schemes’ Promotion and Protection of Members’ Interests ...................... 120
4.6.4
Sensitisation Activities by Social Security Schemes ................................. 121
CHAPTER FIVE ................................................................................................... 122
5.0 CONCLUSION AND RECOMMENDATIONS ........................................... 122
5.1
Summary of Findings ..................................................................................... 122
xiii
5.1.1 What is the Best Legal Framework Established For Governing Social Security
Schemes in Tanzania ...................................................................................... 122
5.1.2 How do the Six Social Security Schemes Operate in Tanzania Mainland? .. 123
5.1.3 How do These Schemes Promote and Protect the Interests of their
Members ........................................................................................................ 124
5.1.4 What are Social Security Schemes Doing to Sensitise their Beneficiaries on
the Functions of Social Security in Tanzania ................................................ 124
5.2
Implications of the Results............................................................................. 125
5.3
Conclusion ..................................................................................................... 125
5.4
Recommendations .......................................................................................... 127
5.5
Limitation of the Study .................................................................................. 128
5.6
Areas for Further Research ............................................................................ 129
REFERENCES ....................................................................................................... 130
APPENDICES ........................................................................................................ 132
xiv
LIST OF TABLES
Table 3.1: Respondents Consulted by the Researcher ............................................... 33
Table 4.3: Opinion of Employers with Regard to Constitutionality of Schemes ...... 42
Table 4.4: Summary of Benefits Provided by Schemes............................................. 43
Table 4.5: Respondents Understanding of the Benefits Available in their Schemes 45
Table 4.6: Available Mechanisms and Remedies for Redressing Members.............. 46
Table 4.7: Members Understanding on Appeal Mechanisms in their Schemes ........ 47
Table 4.8: Opinion of Beneficiaries with Regard to Schemes Customer Care .......... 50
Table 4.9: Opinions with Regard to Having Decentralised Offices .......................... 51
Table 4.10: Respondents Comments on Effectiveness of Social Security Schemes’
Procedures and Processes ...................................................................... 52
Table 4.11: The Distribution of Beneficiaries Choice Regarding the Benefits ........ 56
Table 4.12: Preferences of a Social Security by Employees Members of the
Schemes ................................................................................................. 57
Table 4.13: Pensions Amount from the Existing Social Security Schemes (Retiring at
the Salary of TZS 900,000/- Same Service Period) ............................... 58
Table 4.14: Awareness Regarding Social Security Schemes Investments by ........... 59
Table 4.15: Scheme Members’ Awareness on Sensitation Activities ....................... 61
Table 4.16: Profile of Social Security Institutions in Tanzania Mainland ................. 63
Table 4.17: PSPF Employees and Employers Opinion with Regard to the Scheme’s
Constitutionality ..................................................................................... 65
Table 4.18: Opinion of PSPF Beneficiaries Regarding Customer Care .................... 66
Table 4.20: PSPF Members’ Comments on Effectiveness of Procedures and
Processes ................................................................................................ 69
xv
Table 4.21: Awareness of PSPF Beneficiaries on their Fund’s Investments ............. 72
Table 4.22: Members and Employers Opinion with Regard to PPF
Constitutionality ..................................................................................... 75
Table 4.27: Members and Employers Opinion with Regard to NSSF
Constitutionality ..................................................................................... 84
Table 4.23: Opinion of PPF Beneficiaries with Regard to Customer Care ............... 76
Table 4.24: Opinions with Regard to PPF having Decentralised Offices .................. 77
Table 4.25: PPF Members’ Comments on Effectiveness of Social Security schemes’
Procedures and Processes ...................................................................... 78
Table 4.26: Awareness with Regard to PPF’s Investments by Beneficiaries .......... 80
Table 4.28: Opinion of NSSF Beneficiaries with Regard to Customer Care ............ 86
Table 4.29: NSSF members’ Comments on Effectiveness of Social Security
Schemes’ Procedures and Processes ...................................................... 88
Table 4.30: Awareness Regarding to NSSF’s Investments by Beneficiaries ............ 90
Table 4.31: Members and Employers Opinion with Regard to GEPF
Constitutionality ..................................................................................... 94
Table 4.32: Opinion of GEPF Beneficiaries with Regard to Customer Care ............ 95
Table 4.33: Opinions with Regard to GEPF having Decentralised Offices............... 96
Table 4.34: GEPF Members’ Comments on Effectiveness of Social security
Schemes’ Procedures and Processes ...................................................... 98
Table 4.35: Awareness Regarding GEPF’s Investments by Beneficiaries ................ 99
Table 4.36: Members and Employers Opinion with Regard to LAPF
Constitutionality ................................................................................... 102
Table 4.37: Opinion of LAPF Beneficiaries with Regard to Customer Care .......... 104
xvi
Table 4.38: Opinions with Regard to LAPF Having Decentralised Offices ............ 104
Table 4.39: LAPF Members’ Comments on Effectiveness of Scheme’s Procedures
and Processes ....................................................................................... 105
Table 4.40: Awareness Regarding LAPF’s Investments by Beneficiaries .............. 107
Table 4.41: Members and Employers Opinion with Regard to NHIF
Constitutionality ................................................................................... 110
Table 4.42: Opinion of NHIF Beneficiaries with Regard to Customer Care ........... 112
Table 4.43: Opinions with Regard to NHIF having Decentralised Offices ............. 113
Table 4.44: NHIF Members’ Comments on Effectiveness of Scheme’s Procedures
and Processes ....................................................................................... 114
Table 4.45: Awareness with Regard to NHIF’s Investments by Beneficiaries ....... 116
xvii
LIST OF ABREVIATIONS
AIME
Average Indexed Monthly Earnings
Cap.
Chapter
CSRS
Civil Service Retirement System
DB
Defined Benefit to
DC
Defined Contribution
DI
Disability Insurance
DWP
Department of Work and Pensions
ESOP
Employee Stock Ownership Plan
FERS
Federal Employees Retirement System
FRA
Full Retirement Age
GEPF
Government Employees Provident Fund
HI
Hospital Insurance
HMRC
Her Majesty Revenue and Customs Office
ICT
Information and Communication Technology
ILO
International Labour Organisation
IRA
Individual Retirement Accounts
KNHIF
Kenya National Health Insurance Fund
KNSSF
Kenya National Social Security Fund
LAN
Local Network Area
LAPF
Local Authorities Provident Fund
MMA
Medicare Prescription Drug, Improvement, and Modernization
Act
xviii
NGO
Non Governmental Organisations
NHIF
National Health Insurance Fund
NHS
National Health Services
NIS
National Insurance Scheme
NSSF
National Social Security Fund
OAS
Old-Age and Survivor’s Insurance
OASDI
Old Age, Survivor’s and Disability Insurance
PAIG
Pay-As-You-Go
PIA
Primary Insurance Amount
PPF
Parastal Pension Fund
PSPF
Public Service Pensions Fund
PSPS
Public Service Pension Scheme
SSRA
Social Security Regulatory Authority
SSRAA
Social Security Regulatory Authority Act
SSI
Supplemental Security Income
UNSSF
Uganda National Social Security Fund
USA
United States of America
US$
United States Dollar
URTC
United Republic of Tanzania Constitution
1
CHAPTER ONE
1.0 INTRODUCTION
1.1 Background
Historically, there were several precursors to social security program in Europe and
elsewhere. Pensions for older people were promoted by Thomas Paine, the heralded
political pamphleteer of the American Revolution, more than 200 years ago (Paine,
1795). In his 1795 Treatise on Agrarian Justice, Paine advocated for a 10 percent
inheritance tax on all bequeathed property that would be used to provide every
person of age of 50 years and older with a retirement income of 10 pounds, annually
(Paine, 1795). This proposal went nowhere.
But, nearly a century later, in 1889, Germany’s Chancellor, Otto von Bismarck
implemented a system making his country the first in the world to adopt a national
old-age insurance program, offering government-sponsored annual retirement
income at the age of 70 years (The policy was based on Bismarck’s principle that:
“Those who are disabled from work by age and invalidity have a well-grounded
claim to care from the state.” England followed with its Old Age Pension Act of
1908, which also initiated yearly retirement incomes for those of age of 70 years and
older (Brand, 2007).
America’s Social Security program took its lead from these and other European
predecessors (34 countries had some type of social security system by 1935), but it
also was built upon smaller pension programs already set up in this country (Liu,
2001). Along with limited military pensions for disabled civil war veterans
(including their wives and dependents), most notable among these was the
2
Pennsylvania Railroad Pension, begun in 1890, and widely considered the first
modern pension system in the United States (Liu, 2001). The largest private
employer in the nation at the time, the Pennsylvania Railroad created a benefit plan
“equal to one percent of the average wage in the last ten years of employment times
the number of years worked,” with a mandatory retirement age of 70 years. This
pension system, like those followed it, was launched not only for altruistic reasons,
but also to cultivate worker loyalty, lessen the likelihood of strikes and to decrease
turnover of experienced employees (Liu, 2001).
Summarily and from the above basis, it is evident that social security had its origin
in the very early days of informal human life. Currently, social security refers to a
formal arrangement concerned with protection against socially recognized
conditions, including poverty, old age, disability, unemployment and others. It is
essentially, a concept developed in Europe in the 19th Century mainly aimed at
protecting workers in the formal economy in a clear labour-capital relation in
capitalist society. The focus here was on the worker because unemployment was
hardly an issue. Accordingly, social insurance schemes evolved as the dominant
form of social protection. Social insurance refers to arrangements, usually defined
and prescribed by statute, where people receive benefits or services in recognition of
their contributions to an insurance scheme. These typically include provision for
retirement pensions, disability insurance, survivors’ benefits and unemployment
insurance.
In our country then, it is well known that Tanzania has not ratified the International
Labour Organisation (ILO) Social Security (Minimum Standards) Convention, 1952
3
(No. 102) though it has been attempting to adhere to this Convention in a de facto
manner because most of the existing social security schemes establishment laws
have taken into account the major provisions of the Convention. This is witnessed by
most of these social security schemes on their provisions of different short-term
benefits such as health care, maternity benefits, employment injury and funeral
grants, as well as long-term benefits such as retirement pension, survivors’ pension
and invalidity pensions.
1.1.1
Social Security Progress at International Context
1.1.1.1 The United Kingdom
The United Kingdom social security schemes include firstly, the National Insurance
Scheme (NIS), which provides cash benefits for sickness, unemployment, death of a
partner, retirement, etc (European Union, 2011). People earn entitlement to these
benefits by paying National Insurance Contributions. Secondly, the National Health
Service (NHS), which provides medical, dental and optical treatment and which is
normally available free of charge only to people who live in Great Britain and
Northern Ireland.
Thirdly, the Child Benefit and Child Tax Credit schemes, which provide cash
benefits for people bringing up children. Fourth, non-contributory benefits for
certain categories of disabled persons or carers and lastly, other statutory payments
made by employers to employees entitled to maternity, paternity and adoption leave.
The United Kingdom citizen is normally issued automatically with a national
insurance number after reaching the age of 16. Contributions to the national
insurance scheme are divided into five classes (European Union, 2011).
4
Firstly, an employee pays primary class 1 contributions her/his earnings are above
the primary threshold. The contributions will be a percentage of the employee’s
weekly earnings up to the upper earnings limit and will be deducted from her/his
pay. If the employee’s earnings are below the primary threshold but above the lower
earnings limit, she/he has to pay a contribution in order to protect benefit
entitlement. On the above the secondary threshold, employer’s contributions are not
deducted from part of the employer, he pays secondary class 1 contributions if the
employee’s earnings rise employees’ pay but are the liability of the employer
(European Union, 2011).
Secondly, for the self-employed people and their earnings are above the Small
Earnings Exception, they must pay class 2 contributions which are payable at a flat
rate. If their taxable profits or gains are above the level of the income tax personal
allowance, they also be liable for class 4 contributions which do not count for benefit
purposes (European Union, 2011). Thirdly, class 3 contributions are voluntary and
only count towards basic retirement pension and bereavement benefits. They can be
paid if a person is not liable for primary class 1 contributions, if he has been
exempted from paying class 2 contributions or if his contribution record is not
sufficient to qualify for the benefits listed above. Class 3 contributions are payable at
a flat rate.
Fourthly, special rules apply to certain people, including mariners and airmen and
for employers. Employers are liable for class 1 contributions on most benefits in
kind, for example cars made available for private use and car fuel (European Union,
2011).
5
For the purpose of enhancing coverage, in some circumstances, contributions may be
credited to citizens’ national insurance record even if they have not actually paid
them. This is the case, for example, for periods when these citizens are unable to
work because of sickness or unemployment.
With regard to regulating social security schemes in the United Kingdom, the
Department of Work and Pensions (DWP) is responsible for delivering most social
security benefits. Her Majesty Revenue and Customs Office (HMRC) is responsible
for the collection and recording of contributions and the assessment and payment of
tax credits for families with dependent children and working people on low incomes.
It also administers Child Benefit and Guardian's Allowance. Local authorities
administer Housing Benefit and Council Tax Benefit. The Department for Business,
Innovation and Skills is responsible for developing policy and legislation on parental
leave and pay. Employers are responsible for paying Statutory Sick Pay, Service
authorities are funded to secure health services for their local population through
contracts with NHS Trusts and other service providers and professionals. Social care
services are provided or purchased by local authorities within a financial and
legislative framework determined by the Health Ministry (European Union, 2011).
When compared to Tanzania, the United Kingdom social security system is
considered so advanced and has wide coverage because the coverage do not relate to
contributors from formal sectors only . The social security schemes are interrelated
and thus the control of members is very easy because an UK citizen on attainment of
the 16 years old is issued with a national insurance number. In Tanzania though the
SSRAA is attempting to liberalise issues of social security, the control with regard to
6
coverage is still a challenging issue because of the differences and divergences of the
existing social security schemes which are coming from natural monopolistic
behaviours.
1.1.1.2
United States of America
Another example is taken from the United States of America (USA) where social
security priority is for old ages and disabled people. Currently there are two USA
principal federal programs offering support for the elderly: Old Age, Survivor’s and
Disability Insurance (OASDI), commonly known as Social Security, and Medicare
(Velloso, 2006). Social Security provides retirement income to the elderly, and is
funded from payroll taxes on the working-age population. Medicare provides the
elderly with medical insurance. It is only partly funded by payroll taxes and
premium payments by retirees, with the balance of its resources coming from the
general revenues of the federal government. In addition, the Supplemental Security
Income (SSI) program, serves as a safety net to ensure that the elderly and disabled
have a minimum level of income if their pension benefits are very low or they do not
qualify for Social Security (Velloso, 2006).
Participation in the OASDI system is mandatory and virtually universal. It covers
154 million workers, or more than 95% of the workforce. At the end of 2004, about
48 million people were receiving benefits, including 33 million retired workers and
their family members (representing 69% of the total), 7 million survivors of
deceased workers and 8 million disabled workers and their dependents. Individuals
are entitled to Old-Age and Survivor’s Insurance (OAS), once they have worked 40
quarters in covered employment between the ages of 21 and 62. Recipients of
7
Disability Insurance (DI) must have 20 quarters of contributions in the 10-year
period before disability began. Disabled workers who reach the full retirement age
(FRA) are automatically transferred to full retirement benefits (Velloso, 2006).
Benefits are financed by a payroll tax of 12.4%, half paid by employers and half by
employees, up to an annual (indexed) earnings limit. The earnings ceiling is updated
annually in line with growth in wages. Benefits are based on the average of monthly
earnings of a worker’s 35 highest-earning years prior to eligibility: the average
indexed monthly earnings (AIME). A progressive formula is applied to the AIME to
produce the primary insurance amount (PIA), which is the amount payable to a
worker who retires at the FRA (Velloso, 2006).
Both contributions and benefits are subject to tax. The employee’s portion of the
payroll tax (6.2%) is included in earned income for taxes purposes. Benefits are
included in taxable income according to a graduated formula. Taxes paid on up to
50% of benefits are returned to the OASDI system. The Social Security system is
financed on a Pay-As-You-Go (PAIG) basis, and the cash surpluses of the system
are credited to Trust Funds (Velloso, 2006).
The Medicare program provides health insurance coverage for the aged and disabled.
Part A provides hospital insurance (HI) and is funded by a payroll tax of 2.9%,
equally split between employers and employees. There is no ceiling on covered
earnings. Part A is generally provided automatically, and free of premiums, to
persons age 65 or over who are eligible for Social Security or Railroad Retirement
benefits, whether they have claimed these monthly cash benefits or not. Part B
8
provides supplemental medical insurance (SMI) that covers the cost of physician and
other services, and is funded in part by premiums paid by beneficiaries and
contributions from the general fund of the US Treasury.
A third part of Medicare, sometimes known as Part C, is the Medicare Advantage
Program, which was established as the Medicare+Choice program by the Balanced
Budget Act of 1997 and subsequently renamed and modified by the Medicare
Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. The
Medicare Advantage program expands beneficiaries' options for participation in
private-sector health care plans. The MMA also established a fourth part of
Medicare: a new prescription drug benefit, also known as Part D, beginning in 2004.
Part D activities are handled within the SMI Trust Fund, but in an account separate
from Part B. The purpose of the two separate accounts is to ensure that funds from
one part are not used to finance the other (Velloso, 2006).
The cash surpluses of the HI system are also credited to a Trust Fund, and are
invested in interest-bearing securities of the US Government or in other securities
guaranteed for both principal and interest by the government. They are 100%
excluded below a certain income threshold, with the exclusion rate falling to a
minimum 15% at higher incomes (Velloso, 2006).
The USA also has the Supplemental Security Income (SSI) program which is a firsttier redistributive scheme, serving as a safety net. Under the SSI program, the federal
government provides means-tested monthly cash payments to low-income people
who are 65 or older, or disabled. Most states supplement SSI benefits. People who
9
receive Social Security benefits and who have assets below the specified level
(US$2,000 for an individual and US$3,000 for a couple) can also receive SSI
benefits (Velloso, 2006).
In addition to the Social Security program, it is important to note that the United
States has a wide second-tier of private pension plans and plans sponsored by
employers. 75% of those without a pension plan work for employers who do not
sponsor a plan. Over the past 20 years, there has been a significant shift from
Defined Benefit (DB) to Defined Contribution (DC) plans. Participation is voluntary
and both employees and employers can make contributions. Employees decide how
much to contribute and how to invest the assets. Between 1984 and 1997, these plans
grew from about 30% of all DC schemes to around 70%. DC plans may be used
alone or in conjunction with an Employee Stock Ownership Plan (ESOP), which
buys and holds company stock. ESOPs are a tax qualified DC plan (Velloso, 2006).
In USA there are many pension arrangements offered to public -sector employees as
well, with most being DC plans. There are two pension systems at the federal level,
the Civil Service Retirement System, which covers employees hired before 1984,
and the more recent Federal Employees Retirement System. In 1974, the
Employment Retirement Income Security Act implemented rules to regulate
employer-sponsored plans. It also introduced Individual Retirement Accounts
(IRAs), created to give incentives to save (tax deferrals), to people without
employer-sponsored coverage: the government does not tax original contributions or
returns on contributions until funds are drawn. In 1981, the IRAs were expanded to
10
allow workers covered by employer-sponsored plans to also establish accounts
(Velloso, 2006).
The USA context on social security is also advanced as that of UK. The social
security system in USA is considered as most advanced government program
(Velloso, 2006) implying that there is high involvement of the USA government on
social security protection issues. The coverage and some issues with regard to
administration of social security are highly controlled by the government because of
their sensitivity.
1.1.1.3
Kenya
1.1.1.3.1 Kenyan Retirement Benefits Legislation
The Retirement Benefits Act establishes the Retirement Benefits Authority which is
a regulatory and supervisory body charged with the responsibility of regulation,
supervision and promotion of retirement benefits schemes, the development of the
retirement benefits sector and for connected purposes. According to Haki Jamii
(2007) the Authority does not constitute a retirement benefits scheme, does not
receive contributions from members, does not pay benefits to scheme members, does
not hold scheme funds, does not direct schemes where to invest their money but only
gives broad guidelines as to how scheme funds are to be invested and does not pay
any money to the Government.
Thus, apart from playing its regulatory and supervisory role, the Authority does not
play any substantive role of its own in promoting the right to social security.
Furthermore, in the course of its duties, the Authority has acknowledged the
11
existence of some operational challenges to the growth of the social security sector
in Kenya. These include under-funding of social security schemes especially in the
public sector, poor investment of scheme funds leading to poor returns for members,
misappropriation of scheme funds due to member's lack of adequate awareness, poor
administration and record keeping leading to long delays in payment of benefits to
members, excessive interference by sponsors in scheme affairs, denial of benefits to
certain staff members on spurious grounds etc (Haki Jamii, 2007).
1.1.1.3.2 The National Hospital Insurance Fund Act
The National Hospital Insurance Fund Act (1998) establishes the Kenya National
Health Insurance Fund (KNHIF) and the Fund Management Board and provides for
contributions to and the payment of benefits out of the Fund. The Act has a number
of progressive provisions which include promoting the principle of all-inclusiveness
and participation of all sections of society in the management of the Fund by
providing a slot for one representative of non-governmental organisations involved
in the provision of healthcare services, allows contributions to the Fund from both
employees and from self- employment. The Fund offers monthly premiums that are
low compared to those of conventional insurance schemes, which are actuarially
determined. In relation to the benefits offered, KNHIF has no provision for
exclusions. As such, all medical conditions are covered, including maternity cases;
there is also no limit as to the number of a beneficiary’s dependants.
However, despite these laudable contributions of the KNHIF Act, there are a number
of shortcomings that undermine the full realisation of the right to social security for
the majority in Kenya (Barya, 2011). As such, the fund remains non-accountable to
12
its members and less responsive to their needs. It is also stated that in terms of
accessibility, as at 2005, KNHIF had offices in less than half of the then 72 of
Kenya’s administrative districts, and about 400 accredited health care providers (for
in-patient services), which were unevenly distributed. Access to KNHIF services in
the rural and, particularly remote areas, was minimal due mainly to poor
infrastructure and long distances to the Fund’s offices (Haki Jamii, 2007).
1.1.1.3.3 The National Social Security Fund Act
The Kenyan National Social Security Fund Act, Chapter 258, establishes the Kenyan
National Social Security Fund (KNSSF). Under the Act, KNSSF members are
eligible for age or retirement benefit, survivor’s benefit, invalidity benefit,
withdrawal benefit, emigration and other benefits that may be prescribed by the
Minister with the concurrence of the Minister for Finance.
Despite this broad mandate stated above, the KNSSF Act is said to has failed to
enhance the enjoyment of the right to social security in Kenya in a number of
respects (Haki Jamii, 2007). First, the Act places a lot of emphasis on certain
categories of workers thereby are discriminating against the unemployed and other
categories of workers such as the casual workers and those working in the informal
sector. As observed in the KNSSF website also, the mission of the KNSSF is to
provide basic social security services, and welfare support, to all workers in Kenya.
This includes providing workers with financial security in retirement, as well as
providing them with basic security against contingencies such as employment injury,
illness and/or disability and death. This statement of purpose clearly shows that the
NSSF aims to serve workers. In addition to the mission, substantive provisions of the
13
Act also place a lot of emphasis on the employed sections of the population to the
exclusion of casual workers and those working in the informal sector. Membership
of and contribution to the Fund is pegged on one’s nature of employment.
Second, studies by Haki Jamii (2007) and Centre for Governance and Development
(2005) establish that although the KNSSF was, for many years, the only national
social security provider in the country, its efficacy in promoting the realisation of the
right to social security was undermined by allegations of operational malpractice
including political interference in its management, nepotism in the hiring of Fund
staff, corruption and embezzlement of funds, etc.
Third, the KNSSF Act does not make any provision for refugees, asylum seekers,
stateless persons or persons who are not ordinarily resident in Kenya but are
unemployed. The Second Schedule to the KNSSF Act only recognises “persons not
ordinarily resident in Kenya who are employed in Kenya for periods not exceeding
three years at any one time. Exempt persons, meaning persons to whom the Act does
not apply (Haki Jamii, 2007). Fourth, there is no provision for workers employed in
domestic situations such as domestic workers, house-helps, etc (Haki Jamii, 2007).
1.1.1.3.4 The Pensions Act
The Pensions Act, Cap. 189 provides for the grant and regulating of pensions,
gratuities and other allowances in respect of the public service of officers under the
Government of Kenya. It makes provision for retirement benefits for government
employees. The Act has a number of normative shortcomings that affect the
14
workers’ right to pensions and other retirement benefits: It bestows enormous, even
draconian, powers on the Government and the President to, among other things,
determine whether or not an employee should get his/her pension, gratuity or other
benefit at all or in the event of bankruptcy or insolvency, imprisonment etc.
Haki Jamii (2007) claims the Act places unconscionable, unjust, unjustifiable and
discriminatory conditions on the dependants an officer, who dies in the course of
discharge of duty or other related cause, who can access the deceased officer’s
pension or other benefits e.g. that the deceased’s children should not be more than
six; the widow should ‘be of good character’ and should not remarry; in the case of a
female child, the pensions cease upon her marriage under the age of 21 years etc.
These conditions violate the rights of the dependants, not just to social security, but
to other entitlements as well.
1.1.2 Tanzanian Context on Social Security Progress
1.1.2.1 The Recognition of Social Security
In recent years, a great deal of attention has been given to the reform of social
security system in Tanzania Mainland. The debate has centred on the question of
what kind of social security system is appropriate within this changing economic and
social environment of Tanzania Mainland. As exposure to risk is a major threat in
the day-to-day life of people one will find that illness, disability, death, old age,
widowhood, riots, unemployment, employment injury and natural disasters are some
examples of typical risks which lead to fluctuating incomes and thereby affect the
quality of life.
15
The Tanzanian United Republic Constitution of 1977 (URTC) recognizes the right of
social protection. Article 11(1) of the URTC stipulates thus:
“11. (1) The state authority shall make appropriate provisions for the
realisation of a person’s right to work, to self education and social
welfare at times of old age, sickness or disability and in other cases of
incapacity, without prejudice to those rights, the state authority shall
make provisions to ensure that every person earns his livelihood”.
From this un-conflicting provision of the URTC in the year 2003, the Tanzanian
Government put at place the National Social Security Policy which was followed by
the enactment of the SSRAA which, among others, was intended to establish the
SSRA. The main objective of the country’s having social protection policy is to
establish a means of curbing economic and social distress in the events of
unemployment or any kind of disability due to injury, old age, sickness, e.tc.
The Tanzanian National Social Security Policy (2003) recognises that every human
being is vulnerable to risks and uncertainties with respect to income as a means of
life sustenance. To curb these risks, everyone needs some form of social security
guaranteed by the family, community and the society as a whole. Such
socioeconomic risks and uncertainties in human life form the basis for the need of
social security.
The Tanzanian Social Security Policy (2003) recognises that social security means
any kind of collective measures or activities designed to ensure that members of
society meet their basic needs and are protected from the contingencies to enable
16
them maintain a standard of living consistent with social norms. In most of African
and other developing countries like Tanzania their formal social security systems are
a product of colonialism. During the colonial era, the Tanzanian social security
coverage was extended to the few people who were in the colonial employment.
Most of the people were excluded from any type of public social security scheme.
The remaining population depended on the traditional or informal social security
system for their protection, which is still the case to date. After independence, the
Government of Tanzania introduced a series of policies and measures to reverse the
situation that prevailed during the colonial era. Measures introduced by the Tanzania
Government included those of access to free education and healthcare, provision of
social welfare services to marginalized groups such as the elderly, people with
disabilities and children in difficult circumstances, as well as establishment of
statutory social security schemes.
Regardless the provision in the URTC and the Social Security Policy (2003),
basically the Tanzanian social security systems are made up of contributory and noncontributory schemes. A comprehensive picture of the formal schemes’ coverage,
scope and adequacy of benefits has been stated in subsequent parts. Coverage by
such schemes is generally limited to workers in formal employment, which is a small
fraction of the working population in formal employment. The scope of benefits is
limited mostly to old age, death, survivors, invalidity, maternity and workmen’s
compensation and the levels of benefits are low. Most of the formal social protection
schemes are not structured to conform to the requirements of benefiting their
members.
17
For the non-contributory schemes which are provided by the Government,
International and National NGOs, donors, faith groups and by traditional indigenous
practices, it has been proved difficult to obtain a comprehensive picture of numbers
of the population covered, the scope and depth of provision. However, in the
previous study by ILO (2008) it was generally agreed that the coverage of these
services and programs is limited.
It is true that the rural-to-urban drift also has implications for social protection
provision. In the current period it is estimated that the proportion of urban dwellers
in Tanzania has nearly doubled. In Tanzania Mainland, urban dwellers have higher
unemployment rates than those in the rural areas and are likely to be unemployed for
years. There is currently an acute problem of youth unemployment. There is no
unemployment benefit scheme in Tanzania Mainland and this has an immediate
effect on the levels of poverty of those of working age who become unemployed, as
well as the longer-term effect of increasing poverty in old age for those who have
been in formal employment during most of their working lives. The majority of new
entrants into the labour market are employed in the informal economy in selfemployment, and this is largely in agriculture which falls mostly under informal
employment sector thus limited to access contributory benefit schemes.
The Tanzania National Social Security Policy (2003) reveals challenges social
security in the manner that the social security system existing in Tanzania is
characterised by a number of shortcomings which include their limited coverage,
inadequacy of benefits paid to their members, conflicts in the existing legislations
and problems with regard to investment of social security funds. Currently, the
18
majority of workers who work in the informal economy, their families are excluded
from contributory schemes, as this remains the core problem which minimises the
coverage of social protection in the formal sector through even some of the schemes
which are viewed popular in the public eyes.
1.1.2.2 The Social Regulatory Authority
Among the challenges facing social security schemes which the National Social
Security Policy (2003) has stated is lack of coordination of social security and that
the sector is fragmented as each scheme reports to a different Ministry with differing
operational rules and procedures. As a result, contribution rates, benefit structures,
qualifying conditions as well as plans and priorities differ from one scheme to
another. The policy statement to curb this challenge states the social security sector
to be coordinated by the Ministry responsible for social security matter.
The Policy provides further that social security in Tanzania covers a wider variety of
public and private measures which are 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 Policy states further that the major domains of social security in
Tanzania are for: poverty prevention, poverty alleviation, social compensation and
income distribution. This reveals that many issues relating to social security in
Tanzania are sensitive because they touch on the material interests of organized
workers and the unorganized poor as well as social protection industry and employer
organizations.
19
Adhering to such Policy statement in the year 2008, the Government of Tanzania
enacted the Social Security (Regulatory Authority) Act, Number 8 of 2008
(SSRAA). The SSRAA established the Social Security Regulatory Authority
(SSRA) which is intended to regulate the social security sector and to provide for
related matters. Section 5 of SSRAA, among others provides the functions of the
SSRA. These functions include to regulate and supervise the performance of social
security schemes, to issue guidelines for the efficient and effective operation of the
social security sector, to protect and safeguard the interests of members; and to
conduct programs for public awareness, sensitization and tracing on social security.
Furthermore, section 30 of the SSRAA provides that every employer in the formal
sector shall be required to register his employees with any of the mandatory
schemes, provided that it shall be the right of the employee to choose a mandatory
scheme under which the employee shall be registered. This provision provides some
flexibility to employees to choose the scheme suiting them thus creating a ground of
competition among the schemes. According to the information from SSRA website,
SSRA started its operations recently and by the year 2011 it was in the process of
recruiting most of staff to enable it become fully operational. The SSRA’s functions
have been stipulated in section 5(1) of the SSRAA to attempt to intervene into those
schemes.
1.1.1.3 The Tanzanian Social Security Schemes
Tanzania has a number of social security schemes which some of them existed from
colonial period. The laws established the schemes included the Provident Fund
(Government Employees) Ordinance Cap 51, Provident Fund (Local Authorities)
20
Ordinance Cap. 53 (consolidated to National Provident Fund, Act No. 36 of 1964
and now National Social Security Fund, under Act No. 28 of 1997), Provident Fund
(Government Employees) Ordinance Chapter 51, The Severance Allowances Act,
the Severance Allowances Act, No. 57 of 1962 (repealed and replaced by the
Employment and the Labour Relations Act, No. 6 of 2004) and the Workmen’s
Compensation Ordinance Cap 262 (now the Workmen’s Compensation Act, 2008).
Along the time, these schemes have been modernized through their establishing laws
to become more consistency with the requirements of ILO standards on the core
elements of social security protection. The ILO instrument adopted at its 35th session
in June 1952, itemised a number of contingencies and benefits required in the
minimum standards of social security namely old age, invalidity, survivorship,
employment injury, maternity, medical care, sickness, unemployment and death.
Thus, the social security system in Tanzania can be divided into three benefit
categories. Firstly, the mechanisms providing protection in case of sickness and
health-care benefits; secondly the social insurance or schemes that cover
contingencies such as old age, invalidity and death which are referred as the pension
system; thirdly, a component obliges employers to protect employees against
accidents, such as workers’ compensation for injury.
The social security schemes available include National Social Security Fund (NSSF),
Parastatal Pension Fund (PPF), Public Service Pension Fund (PSPF), Local
Authorities Pension Fund (LAPF), National Health Insurance Fund (NHIF) and
Government Employees Provident Fund (GEPF. Workers in the informal sector,
peasants, agricultural employees, and persons employed in small businesses, small-
21
scale industries, fishing, etc have no pension benefits arrangement. Informal sector
depend to a very large extent on the extended family and clan for support during old
age, invalidity and sickness.
A study by ILO (2008) states by the year 2007 there were approximately 672,206
identified active members in the Tanzanian social security schemes. The schemes, as
stated clearly in their respective establishing laws, are providing different benefits to
their members ranging from old age, survivors, invalidity, maternity, funeral, health
insurance, death, employment injury, education and withdrawals benefits. The
schemes are under the control of different ministries, though the Ministry of Finance
controls most of these schemes. Depending on the scheme, the amount of
contribution of an employee to the scheme is mostly 20 percent of the employee’s
salary though employees from the GEPF contribute 25 percent of their salaries to the
scheme. Some schemes interpret “salary” for contributions purpose to be computed
from a “gross salary”.
The purpose of most of social security schemes is to gain and retain members and at
the same time to promote the members’ welfare through curbing social distress
which might be caused by particular circumstances happening from employment.
Likely, most of these social security schemes which have been involved in the
investment activities which help the growth of our country’s economy.
To be
competitive social security schemes have to plan for this, remaining and improving
their competitiveness in due course of enhancing their capability of acquiring more
members which might increase contributions at the ultimate goal of paying
satisfactory benefits to their members. To social security schemes involved in
22
investment activities, their competitiveness is also looked on their ability of initiating
more investments for the benefit of their covered beneficiaries and the country’s
economy at large. Beside the availability of the Social Security Policy, the
establishment of the SSRA and the existence of the social security laws, the
available social security schemes seems to be locked in becoming competitive
among themselves as stated in the statement of the research problem.
1.2
Statement of the Research Problem
For a social security scheme to be competitive it has to be assessed on how it is
fulfilling its functions as stipulated in the SSRAA. Before the enactment of the
SSRAA, each scheme acted independently according to its establishing statute. Now
there is this new law attempting to coordinate, among others, the activities of social
security schemes. There are however a number of challenges which even if the law
coordinating the activities of social security schemes is at place, these challenges
need to be examined. The challenges are those relating to hindering the
competitiveness level of social security schemes and they include:
Firstly, out dated social security legal frameworks which affect good governance in
these schemes. This is witnessed by lack of transparency on these schemes because
the constitutionality aspects of most of schemes are not clear. Secondly, the ways
and styles on which social security schemes operate affect their objectives on
meeting social security protection to their members. This is well seen on the poor
customer care issues by these schemes, centralization, complications of processes
and procedures of effecting members’ claims and delay in adopting the application
new technologies.
23
Thirdly, the available social security schemes are lagging behind on the issues of
promotion and protection of the interests of their members and thus leading to
limited scope of their competitiveness when a comparison is made. Fourth, there are
limited advocacy and awareness programs being conducted by social security
schemes thus hindering a lot their competitiveness levels within Tanzania Mainland.
This makes the agenda of widening social protection in Tanzania to be lagging
behind.
1.3 Research Objectives
The proposed research paper shall have both broad and specific and specific
objectives as follows:
1.3.1 Main objective of the Study
The broad objective of the study is to examine the competitiveness of the
contributory social security schemes within Tanzania Mainland.
1.3.2
Specific Objectives
The specific objectives of the study are to:
i. To examine whether the legal frameworks governing the selected social
security schemes benefit the members of those schemes.
ii. To study the operations of six social security schemes in Tanzania Mainland.
iii. To analyse how these social security schemes promote and protect the
interests of their members.
24
iv. To study the awareness of the beneficiaries on social security schemes in
Tanzania Mainland.
1.4 Research Questions
This research has answered the following questions:
i. What is the best legal framework established for governing social security
schemes in Tanzania?
ii. How do the six social security schemes operate in Tanzania Mainland?
iii. How do these schemes promote and protect the interests of their members?
iv. What are social security schemes doing to sensitise their beneficiaries on the
functions of social security in Tanzania?
1.5
The Significance of the Study
The proposed research will be of significance to the social security schemes existing
in Tanzania because this research will expose their competitiveness. If taken
positively the proposed research will be good information for those social security
schemes serious in business to make use of such information in adopting
recommendations for the improvement of their schemes. Specifically the study shall
be of significance as follows:
Firstly, the study will reveal how the six social security schemes operate in Tanzania
Mainland. This will be of significance in the manner that, schemes may be capable
to learn from each other as which is the best may of operating their businesses for
interests of their beneficiaries as well to become more competitive by improving
their operations.
25
Secondly, the study will expose suitable means of promoting and protecting interests
of members of social security schemes. This shall, in additional, enable schemes to
enhance or establish systems or policies which shall be effective in promoting and
protecting interests of members. The scheme which has effective means of
promoting and protecting interests of its members attract more memberships.
Thirdly, the study shall be of significance in making the social security stakeholders
understand the legal frameworks governing the selected social security schemes and
how those legal frameworks are effective in satisfying their members. This may also
enable social security stakeholders improve or adopt the best legal framework
governing social security schemes. Fourth, this study shall assist in exposing how the
stakeholders understand issues relating to social security schemes in Tanzania
Mainland. The study will help in understanding the extent coverage of large group of
the Tanzania on how to invest in social security schemes. Fifth, employers and
employees being the main stakeholders of the social security schemes shall be
capable to identify which schemes suit them the best and thus they may make a best
choice among the competing schemes.
26
CHAPTER TWO
2.0 LITERATURE REVIEW
In this study the researcher did not encounter any literature looking directly on the
competitiveness of social security in Tanzania or at international context. However,
the researcher was capable to capture some of the writings which reflects issues of
social security which have been subject to this study within Tanzania and some from
Kenya and Uganda. Kenya and Uganda are East African Countries which have some
similar elements of social security protection systems with Tanzania. For this
purpose the reviewed literature reflects Tanzanian, Kenyan and Ugandan contexts.
Mchomvu, et al. (2002) stated that in the past two decades, research on social
security in Tanzania has focused mainly on formal social security and particularly on
the protection of workers against contingencies associated with temporary or
permanent loss of income. According to them (Mchomvu, et al. 2002) by the year
2002 formal social security schemes were covering only 5% of the labour force and
most of those covered were working in the urban formal sector and those schemes
provided few benefits. These authors recognise that at least there is existence of
different types of social security systems in Tanzania and thus there is some
commitment from the government to act as a guarantor of all existing formal social
security systems in the country.
They also state challenges which the social security schemes face range from their
coverage, inefficiency, monopolistic framework, inflexibility, lack of systematic and
comprehensive social security policy, low pension rates, old fashioned institutional
frameworks and lack of public information with regard to social security schemes.
27
To them these schemes cover very few people as they have concentrated to working
groups only. Furthermore benefits which are paid by these schemes are inadequate in
the manner that they are not consistency to the core objective of social protection
and there are delays in making payments to members; they are bureaucratic,
inefficiency and are faced by poor governance characteristics
Furthermore, the study by ILO (2008) establishes that by the year 2006 the social
security in Tanzania Mainland was still characterized by limited coverage in terms of
membership, scope and access to benefits, where social security coverage was less
than 1 per cent of the entire population and about 6.5 per cent of the formal working
population and mostly the entire informal sector lacked coverage and had therefore
limited resilience to economic shocks and was vulnerable to falling into poverty.
The report states generally the challenges facing social security systems of Tanzania
Mainland which include uncoordinated pension policy and lack of income support in
case of unemployment. Furthermore the report reveals the problem of uncoordinated
benefit provision across existing schemes and lack of portability.
Wangwe (2005) in one his paper stated that the existing social security schemes had
been facing the challenge of having to cope with the increasing need for social
protection as a result of the distributional effects of reforms and their implications on
welfare of the poor, necessitated serious consideration for reform on policy on social
security.
Dau (2006) in one of his conference paper stated a number of inadequacies facing
social security systems in Africa, and in particularly in Tanzania Mainland. These
28
inadequacies include: firstly, laws establishing social security institutions in
Tanzania Mainland provide that benefit rates may be reviewed from time to time by
the Board of Trustees and adjusted in line with actuarial valuation. However, the
laws do not provide an automatic mechanism to adjust benefit rates in line with
inflation and continuous rise in wages.
Secondly, that Social protection in Africa is characterized by limited coverage in
terms of membership, number of benefits, and the access to benefits. The Tanzanian
experience indicates that, the social security coverage is less than 1 per cent of the
entire population and about 5 per cent of the formal working population. Almost the
entire informal sector is not covered by any social security scheme. Thirdly, the
application of ILO Convention No. 102 in African countries had been very limited
due to the inherent nature of the African life style in relation to the main
characteristics of the Convention. While defined contingencies under the Convention
focus on the nuclear family, its application in Africa may not be very relevant
because of the very nature of the African way of life where a family includes
extended family members.
Furthermore in his article Gaya (2011) stated that there are considerable challenges
facing Tanzanian public pension systems. He continued to mention those challenges
as problems related to inherited institutional design and the resultant governance
problems, the mismanagement of these schemes, dissatisfaction among members on
service delivery and the problem of members losing their social security coverage
when they move between schemes.
29
In Kenya, a publication by Kenya Ministry of State for Planning (2010) , states the
previous Constitution of Kenya did not have provisions on social protection until
recently when the current Constitution recognised for the right to social security and
Kenya has for a long time not domesticated the provisions of international treaties
and conventions on the right to social security, a pre-requisite before such provisions
can be invoked in domestic court, that the steps being taken now under the auspice
of the new Constitution are still very gradual. It is stated further that Kenya does not
have an official policy on social security, social insurance or other form of social
protection. This means that whatever legislative or institutional interventions exist or
are made from time to time do not flow, emanate or derive from a clear, central,
coordinated policy locus (Kenya Ministry of State for Planning, 2010).
Haki Jamii (2007) states social security in Kenya is regulated and provided for under
a plethora of laws (Kenya Ministry of State for Planning, 2010) (like was in
Tanzania) establishing its respective schemes - the Retirement Benefits Act, 1997,
the Retirement Benefits (Amendment) Act, 1998, the National Social Security Fund
Act, the National Health Insurance Fund Act, the Pensions Act and the Pensions
(Increases) Act, indicating that the social security schemes in Kenya are so
fragmented and are not coordinated. It is clear that Kenya has a number of social
security schemes but is lacking the regulator and each scheme seems to be operating
on its own.
Barya (2011) states that there are a number of shortcomings that undermine the full
realisation of the right to social security for the majority in Kenya which include:
periodic contributions which are low compared to contributions prescribed under
30
commercial schemes and poverty incidence in the country limiting members to
subscribe to the scheme. He further states (2011) that poor quality service delivery;
inefficiency in collections; limited coverage; bureaucratic, tedious claiming process,
with high transaction costs that are characterized by fraud and abuse are also the
factors which hinder the performance of social security schemes.
Regarding Uganda, Barya (2009) states that, until recently, social security has not
been a subject of study, debate or concern by both government and academia in
Uganda, nor have the more directly concerned social groups, that is workers and
employers, have been passionately concerned with the issue. The only exception has
been discussions around the issue of the mismanagement and inadequacy of the two
major formal social security providers, the Uganda National Social Security Fund
(UNSSF) and the Public Service Pension Scheme (PSPS) (Barya, 2009). Both the
PSPS and the NSSF, the social security situation in the country remains
characterized mainly by exclusion of the majority from this internationally
recognised right. The PSPS is run by the Ministry of Public Service, catering for
civil servants from central and local government, the army and to some extent police
and prisons (Barya, 2009).
The UNSSF is set up by the National Social Security Fund Act. In the first instance,
the lump sum payment may run out quickly and the beneficiary slides into
destitution. This tends to defeat the purpose for which social protection arrangements
are normally intended, ensuring income security in old age. The benefits available
are too limited, well known risks and social needs like sickness, unemployment and
problems such as HIV/AIDS were not anticipated and thus not cared for (Barya,
31
2009). Furthermore the scheme also deals with employees working for employers
with 5 or more workers. This leaves out many firms and workplaces which are the
majority in the country. There is also excessive government control. For instance, no
investment can be made by the Fund before consulting the Minister (Barya, 2009).
32
CHAPTER THREE
3.0 MATERIALS AND METHODS
3.1 Research Design
A research design is a plan of action, plan for collecting and analyzing data in an
economic, efficient and relevant manner. The research design details any important
step in order to accomplish information. In this study both quantitative and
qualitative data collection instruments were used. To begin, individual interviews
using structured questionnaire were used to gather quantitative data for the purpose
of assessing the competitiveness of social security schemes in Tanzania Mainland.
Qualitative methods were then conducted to verify the data collected in getting indepth insights on the study. The qualitative methods conducted were semi structured
interviews with participatory discussions.
3.2 Area of the Study
This study was conducted at Dar es Salaam and Dodoma. In Dar-es-Salaam the
researcher was capable to visit five headquarters of the schemes in the study and the
SSRA. At Dodoma, the researcher visited the headquarter of one scheme which is
the LAPF.
3.3 Sample Size of the Study
Purposive sampling was applied in selecting of social security schemes stakeholders
whereas, probability sampling whereby each respondent coming from the respective
social security scheme had equal chances to be selected. In this study, the researcher
was capable to consult the population of about 219 people constituting of social
security members, social security schemes managers, employers and the social
33
security regulator in which a simple random sampling was used to avail only helpful
information concerning the study. Therefore, the researcher consulted respondents as
indicated Table 3.1.
Table 3.1: Respondents Consulted by the Researcher
Scheme/Regulator
Managers
Employers
Members
Total
NSSF
1
8
38
47
PPF
1
8
26
39
PSPF
1
8
25
36
GEPF
1
8
25
29
LAPF
1
8
25
34
NHIF
1
8
25
34
SSRA
1
-
-
3
Total
7
48
164
219
3.4 Tools and Techniques of Data Collection
Both primary and secondary data were used in the study. Primary data were
collected through observation and direct communications with respondents through
interviews and questionnaire. Secondary data were collected through books, reports,
journals and internet sources.
3.5 Data Analysis and Interpretation
According to Kothari (2004) qualitative research is based on qualitative phenomenon
whereby concentration is on phenomena relating or involving quality or kind. From
that background, this study was intended to investigate the competitiveness of the
social security schemes and understand what factors motivate such competitiveness
as viewed through the selected sample.
34
From that basis data collected from both primary and secondary sources were edited
and codified. After codification the data there was a tabulation and analysis of those
data by using computer.
The data were cleaned and report writing was done and
presented in form of analysis and tables. This involved both primary data from
respondents through observations, interviews and questionnaire and secondary data
from books, annual reports, journals and internet sources.
3.6 Data Reliability and Data Validity
It refers to the consistency with which repeated measures produce the same results.
There are two aspects of reliability in this context; external and internal reliability.
External reliability refers to the degree of consistency of measurement overtime.
When testing external reliability of a measure, is normally examined; the test is
administered to the same group of subjects on different occasions. Internal reliability
on the other hand is the most crucial in connection with the multiple item scale like
the one used in this study. There are several methods for estimating the existence of
internal reliability (Cronbachs, 1951). For the purpose of this study Cronbachs alpha
method, which is widely applied measure of internal consistency, was used.
Cronbachs (1951) suggested a cut off of 0.7 point or higher to be a good to retain a
variable in adequate scale.
Data validity in research refers to the correctness of data. There are various ways
which are normally used in measuring data validity. These include, face validity,
discriminate validity, convergent validity, nomological validity and others. To
ensure validity of the data collection instrument for this study, a pilot study of 10
35
respondents was conducted by the researcher. The results, comments and
observation from those 10 respondents were used to modify the questionnaires.
36
CHAPTER FOUR
4.0 FINDINGS AND DISCUSSIONS
This chapter presents the research findings by responding to the research’s
hypothesis that the Tanzanian Mainland Social Security Schemes are not competitive
to each other by answering the four research questions.
4.1 What is the Best Legal Framework Established for Governing Social
Security Schemes in Tanzania?
The study indicates that few of the schemes have favourable legal frameworks for
governing the schemes for the benefit of the schemes themselves and their
beneficiaries. In determining the best legal framework the researcher looked on a
number of issues which include the constitutionality of the schemes, benefits
stipulated in their relevant laws and available mechanisms and remedies in
redressing members against the schemes.
4.1.1
Constitutionality of the Schemes
Through statutory provisions, the study has looked on the issue of constitutionality
of social security schemes simply because constitutionality disclose good corporate
governance which is essential not only to social security schemes but for all
successful
organisations
worldwide.
Among
the
principles
underlying
constitutionality of social security schemes are openness, integrity and
accountability. These are foundations on which effective organisations are built.
Social security schemes are taken as part of government business enterprises or state
corporations and or other organisations, including boards, agencies and institutions
which are established as semi-autonomous entities with their own governing bodies.
37
Social security schemes need effective structures to ensure proper accountability,
clear communication with stakeholders and clarity about roles and responsibilities.
Proper accountability means being accountable for the management of stakeholders
money and for the performance of the social security schemes in relation to clearly
defined objectives. The appointments to the governing body of a social security
scheme should be made by the relevant Minister on the advice of the scheme’s
oversight body. This process should ensure that appointments are based on merit, as
a result of free and open competition.
The chief executive, senior managers and staff should be held to account for the
extent to which they have achieved their agreed objectives. Communication with
stakeholders (for example, employers, employees, their trade unions, the sponsoring
ministry, suppliers, other beneficiaries) should be open, honest, transparent, timely
and relevant to the stakeholders’ interests. It should also be adequate and present the
information fairly. There should be clearly defined divisions of responsibility at the
head of social security schemes to ensure a balance of power and authority. These
should include the respective roles of the executive and non-executive members of
the governing body, the chairman, the chief executive and other senior managers.
Doing that enables effective complaints and whistle-blowing procedures are
implemented which are essential for the good governance of each social security
schemes. Complaints procedures should ensure that complaints from users and other
external stakeholders are adequately monitored, investigated, resolved and
appropriately reported. Whistle-blowing procedures should ensure that all significant
38
staff concerns, especially those concerned with the ethical management of the
schemes’ funds are adequately dealt with.
This study has revealed in Tanzania Mainland the constitutionality with regard to
social security schemes is not viable to the modern trends with regard to the issues of
good governance occasioned by good legal frameworks. There is no any of the
schemes which has all the good characteristics relating acceptable constitutionality.
For example, in the Table number 4.1 most of schemes’ chairpersons are holding the
chairmanship positions by virtue of their other employment positions. Statutorily and
practically, PSPF, PPF, GEPF and LAPF the Permanent Secretary of the Ministry of
Finance becomes the Chairman of each of all those schemes.
There is also a problem which creates higher possibility of irresponsibility to
appointed leaders as the appointees in their different positions find to be appointed
by the same person. For example, through their respective laws, the Chairman of the
Board of Trustees of NSSF is the appointee of the President and similarly the
Director General of NSSF is also the appointee of the President. Thus it becomes
difficult for these two to be liable to each other. There is a clear example that the
NSSF’s Director General has excessive powers to the management of Fund. Under
the NSSF as provided in most of its provisions in the NSSF Act is mostly under the
auspice of the Director General for example the provision with regard to the
functions of the Director General states he is the Chief Executive Officer of the
Board and oversees the daily operations of the Fund.
39
Table 4.1: Appointments, Tenure, Powers and Functions of Social Security
Schemes Top Officials
Scheme Appointments
Tenure
Powers and Functions of the
Appointees
PSPF
Chairman who is
the Permanent
Secretary in the
Ministry of
Finance and
Members of the
Board are
statutorily created.
The Director
General is the
appointee of the
President
No limits due to
their positions held
at their respective
offices
To manage and administer the
Fund, invest, disbursement of
pensions and other benefits,
advise the Minister, appoint other
employees of the Fund and do all
other things proper for the
administration of the Fund.
Under the
President’s
discretion
Chairman who is
the Permanent
Secretary in the
Ministry of
Finance and not
less than four and
not more than
eight other
members
appointed by the
Minister.
Three years and
eligible for a
reappointment
Director General
-
Chairman
appointed by
President and
other Trustees
automatically
statutorily created
Three years and
eligible for reappointment
Director General
appointed by the
President
Chairman who is
nominated by the
Principal Secretary
from Ministry of
Under the
President’s
discretion
As may be specified
in their respective
appointment
instruments
The Secretary of the Board and
subject to the directions of the
Board is responsible for the day
to day administration of the
Scheme.
To manage and administer the
Fund, to invest moneys available
in the Fund, disbursement of
pension, gratuities and other
benefits in accordance with the
provisions of this Act, to advise
the Minister on matters relating to
the administration of this Act, to
protect, safeguard and promote
the interest of the members and to
do all such acts and things as the
Board may reasonably be
expected to do.
Day to day administration of the
Fund
To formulate, implement and
review the policy relating Fund,
to control and administer the
Fund, invest monies available in
the Fund, provide technical
assistance and advisory service
for the purposes of promoting
social security programmes; and
do all such acts for efficient
administration of the Fund
The Chief Executive Officer of
the Board and oversees the daily
operations of the Fund
Control and management of the
Fund in accordance with the
provisions of the law and
regulations made under the law
PPF
NSSF
GEPF
40
Scheme Appointments
Finance and at
least two members
to form Board of
management
Director General
(not statutorily
appointed)
LAPF
NHIF
Tenure
Powers and Functions of the
Appointees
-
The Chief Executive Officer of
the Board of Management and
oversees the daily operations of
the Fund
To manage and administer the
Fund, protect, safeguard and
promote the affairs of the
members of the Fund, advise the
Minister, appoint other officers of
the Fund and any functions as
stated in the LAPF Act.
Chairman who is
the Permanent
Secretary Ministry
of Finance and
other members
automatically
statutorily created
Three years
subjected to reappointment
Director General
who is appointed
by the President
Chairman and
other members
automatically
statutorily created
As may be specified
in the appointment
instrument.
Three years
subjected to reappointment
Director General
who is appointed
by the Board
Under the discretion
of the Board
Performs his duties as per
directives given to him by the
Board.
To organise the Fund’s office,
appoint personnel, fix their salary
and other remuneration as may be
deemed necessary and upon
recommendation by the Director
General, to supervise the
provision of health benefits and to
inspect medical and financial
records pertaining to the Fund of
the health care providers and
beneficiaries.
The Secretary to the Board and is
responsible for the general
conduct of the operations and
management functions of the
Fund and for other duties
assigned to him by the Board
from time to time
Source: Statutory Provisions in the Relevant Scheme’s Laws
Furthermore, most of appointees in the studied schemes have no statutory guarantee
with regard to their serving tenure. The Director Generals at PSPF, NSSF, LAPF and
NHIF may stay in their positions according to the wishes of the appointing
authorities and thus they may be removed at their positions anytime or their period to
41
stay in those positions may be extended due to any personal motives, e.g. political,
nepotism, etc. Worse enough the Director Generals at GEPF has no any backing
from the provisions of law on his appointment, its not elaborately known as to who
appoints him to that position.
Through field study, through the reached respondents the group of employees
members of the schemes, of 164 respondents asked if they understand the issues of
constitutionality of their top officials of the schemes only 40 showed to be aware
such issue which is about 24 percent of employees members of the schemes (Table
4.2).
Table 4.2: Opinion of Beneficiaries with Regard to Constitutionality of Schemes
Opinions
PSPF
PPF
NSSF
GEPF
LAPF
NHIF
Total Percentage
(%)
Understand the
4
6
12
3
9
6
40
24
21
20
26
22
16
19
124
76
25
26
38
25
25
25
164
100
constitutionality
of their scheme
Do not
understand the
issue of
constitutionality
of their scheme
Total Number
of Respondents
Source: Field Data, 2012 - 2013
With regard to the category of employers out of 48 employers interviewed 23 of
them, which is 48 percent, showed interest with regard to the issue of
42
constitutionality of the top officials of the scheme while showing that NSSF’s
director general is most known among the chief executive officers of the social
security schemes in Tanzania Mainland.
Table 4.3: Opinion of Employers with Regard to Constitutionality of Schemes
Opinions
PSPF
PPF
NSSF
GEPF
LAPF
NHIF
Total
Percentage
(%)
Understand the
2
5
8
1
5
2
23
48
6
3
0
7
3
6
25
52
8
8
8
8
8
8
48
100
constitutionality
of their scheme
Do not
understand the
issue of
constitutionality
of their scheme
Total Number
of Respondents
Source: Field Data, 2012 - 2013
However, generally most of employers and employees members of the social
security schemes are not interested on the issue of constitutionality of top officials of
the social security schemes indicating their existence have no any support of very
important stakeholders. Most of them believed the appointments are done by the
President and that blaming the URTC to have provided excessive power to the
President in appointing top officials of the social security schemes (Schemes’
Members Personal Communications, 2012 -2013).
43
4.1.2
The Provisions of Law with Regard to Benefits Obtainable in The
Schemes
Most of benefits provided by social security schemes have backing from the
provisions of the respective laws. In establishing a notable social security scheme
there has to be conformity with ILO Standards under its instrument adopted at its
35th session in June 1952 that a scheme to be established to bear at least seven
benefits to would be members of the scheme. In this study, there were about ten
benefits which statutorily recognised in all the schemes as stipulated in the Table.
4.4.
Table 4.4: Summary of Benefits Provided by Schemes
S/N Benefit Category
PSPF
GEPF
PPF
NSSF
LAPF
NHIF
1
Old-age
√
-
√
√
√
-
2
Survivors’ pensions
√
√
√
√
√
-
3
Death benefit
√
-
√
-
-
-
4
Funeral Grant
√
-
-
√
√
-
5
Maternity benefits
-
-
-
√
√
-
6
Employment injury
√
-
-
√
√
-
-
-
-
√
√
√
invalidity/disability
7
Health/Medical
insurance
8
Education benefits
-
-
√
-
√
-
9
Gratuity benefit
√
-
√
-
-
-
10
Withdrawal benefit
√
√
√
-
√
-
Source: Statutory Provisions in the Relevant Schemes’ Laws
Through the Table 4.4, it is clear that some of social security schemes are not viable
to ILO’s standards. The GEPF, for example provides only three benefits which are
44
survivors, withdrawal and loans benefits. Loan and withdrawal benefits do not have
the backing of the ILO’s standards but has been provided by GEPF as a plan of
making its members benefit from their contributions which have been remitted to the
Fund. The other scheme is the NHIF which has singled out one benefit – medical
services to a category of services provided under medical services generally. Such
NHIF medical services include tests, drugs, out-patient services, in-patient services
and minor and major surgery.
On the part of PPF it provides six benefits though has a seventh program known as
Deposit Administration Scheme which lump sum or lump sum with annuities based
on total member’s contribution plus interest accrued thereon are provided to
beneficiaries. On their part LAPF has about 9 benefits stipulated in their law
(Section 26 of LAPF Act, 2006) however are payable after the Minister’s approval.
Currently LAPF pays only six benefits plus members’ loan issuance plan to which
has been inaugurated recently.
PSPF and NSSF provide seven benefits, some of them as backed by their respective
provisions of their establishing laws. NSSF has been for a long time issuing to its
members withdrawal benefit which is not backed by any provision of the NSSF Act.
From the field survey, for the interviewed respondents, 20 out 164 (12%) employees
members of the social security schemes were capable to list more than four benefits
existing through their scheme’s establishing laws. The remaining numbers of
employees (144) were capable to mention one to two benefits (Table no. 4.5). This
indicates that about 88% of employees are not aware of the existing benefits in their
respective schemes.
45
Table 4.5:
Respondents Understanding of the Benefits Available in their
Schemes
Question:
PSPF PPF NSSF GEPF LAPF NHIF Total
Percentage
May you list
(%)
benefits which
are available
in your
scheme?
Mention of 1-
23
21
29
24
22
25
144
88
2
5
9
1
3
0
20
12
25
26
38
25
25
25
164
100
2 benefits
Mention 3above benefits
Total
Number of
Respondents
Source: Field Data, 2012 - 2013
4.1.3
Available Mechanisms and Remedies for Redressing Members
As a general principle most of statutes have to include in them provisions which
indicates how dispute settlement mechanism to ensure the availability of remedies
for the offended or aggrieved subjects of the respective law. Reviewing the statutes
of the 6 schemes studied, one finds that 5 out of 6 of them (83%) have available
remedies when it happen that employer has defaulted in fulfilling his obligations to
the Fund (Table 4.6). Among the core obligations of employers to Funds are to
register employees to the Funds and remit their contributions. The GEPF law is the
only statute which has got no such obligation and probably it is because the law is
the oldest among the statutes of the 6 schemes.
46
Table 4.6: Available Mechanisms and Remedies for Redressing Members
Scheme
Is there available remedies
Availability of appeal levels
for defaulting employer or
scheme
Employer
Scheme
PSPF
√
×
SSRA
PPF
√
×
SSRA
NSSF
√
×
Appeals to the DG, to NSSF Appeals
Tribunal, NSSF Medical Appeals
Tribunal and recently to SSRA
GEPF
×
×
SSRA
LAPF
√
√
SSRA
NHIF
√
×
NHIF Appeals Tribunal and SSRA
Source: Statutory Provisions in the Relevant Laws
The researcher also looked on the availability of remedies in the respective schemes
in case of default of obligations toward members. Among the obligations of the
schemes is to ensure they pay benefits in a reasonable time, employer register their
employees to the Funds, employees have information with regard to their
membership status, etc. Among the 6 schemes (Table 4.6) only one scheme has a
provision which provide for a way on which an employee member may initiate a
complaint against the scheme. The provision is obtained at section 66 (1) of the
LAPF’s statute and states thus:
“66(1) – Suits shall not be commenced against the Board without
issuance of a three months notice of the intention to commence the suit
served upon the Board by intending plaintiff or his agent.”
47
According to an interviewed official at the LAPF, the provision is intended to
welcome members of the LAPF to have their grievances sorted out before they
would lodge complaints against LAPF at the court of law or currently at SSRA
(LAPF Employee Personal Communications, Saba Saba Exhibition, 2013).
All in all, most of the schemes do not have provisions on which provide a clear way
for members to initiate complaints against them. This has caused a lot of problems to
members of social security schemes. This is supported by responses from
respondents that they do not appeal because there is no possibility of appealing
against their schemes defaults. In finding this the researcher posed a question to
employees if they do understand mechanisms of appealing against defaults by their
schemes.
Table 4.7: Members Understanding on Appeal Mechanisms in their Schemes
Question: Do
PSPF
PPF
NSSF
GEPF
LAPF
NHIF Total
you know
Percentage
(%)
where to
appeal in case
you are
aggrieved by
your scheme’s
conducts
against you?
Yes
2
5
8
1
5
7
28
17
No
23
21
30
24
20
18
138
83
Total Number 25
26
38
25
25
25
164
100
of
Respondents
Source: Field Data, 2012 - 2013
48
Table 4.7 indicates most of employees lack knowledge on the existence of appeal
mechanisms against their schemes in case they have any grievances against them. Of
164 employees interviewed 28 only, which is 17% are aware of appeal mechanisms
within their schemes while the remaining 138 employees which is about 83 percent
do not know if there is appeal mechanisms within their schemes or elsewhere. Most
of employees gave an example of the delays in the processing of their benefits, that
when delays persist they have no appeal alternative rather than wait until when their
schemes decide to settle their matters at their own discretions and in some cases
solutions may come after six months.
4.2 How do the Six Social Security Schemes Operate in Tanzania Mainland
The researcher also considered in studying the operations of each social security and
then made a comparison to each other among them for the purpose of establishing
their competiveness. There are a lot of operations factors which when looked
severally or jointly may establish the competitiveness of organisations in the same
business line.
Social security schemes and generally organization’s operations factors are
strategically important precisely because most of social security schemes activities
comprises the day-to-day activities within the operations function. It is the myriad of
daily actions of operations, when considered in their totality that constitute the
schemes’ long-term strategic direction. The relationship between a scheme’s
mission, vision and its operations is a key determinant of its ability to achieve longterm success or even survival. Schemes success is only likely to result if short-term
operations activities are consistent with long-term strategic intentions and make a
49
contribution to competitive advantage. Likely, the relationship between operations
and the other business functions is similarly important. The objective of the
operation functions of the social security schemes is to produce services required by
their members and other stakeholders whilst managing resources as efficiently as
possible.
There are a lot of operations aspects with regard to social security schemes
competitiveness in Tanzania. The researcher has however considered only four
aspects in this study which include issues of customer care, decentralization of social
security activities, processes and procedures of effecting members’ benefits and the
use of new communication technology.
4.2.1
Customer Care
A customer is an individual who, or an organisation which, uses the output of other’s
job. In the social security aspect, customers are mostly the members beneficiaries of
the schemes and other stakeholders like the researcher who went there for the
purpose of collecting data. Customer care generally is concerned with taking care of
customers to ensure that their needs and expectations are met and or exceeded.
In this study the researcher revealed that most of social security schemes in Tanzania
were doing well on the issue of customer care because there were no serious
complaints with regard to how social security scheme members are being attended
when they visit their schemes’ offices rather than availability of complains relating
to substantive issues concerning benefits processing processes to qualifying
members as indicated in the Table 4.8.
50
Table 4.8: Opinion of Beneficiaries with Regard to Schemes Customer Care
Opinions
PSPF
PPF
NSSF
GEPF
LAPF
NHIF
Total
Percentage
(%)
Warmly
23
16
18
13
10
16
96
59
2
6
12
8
8
6
42
26
0
4
8
4
7
3
26
15
25
26
38
25
25
25
164
100
welcomed and
effectively
attended
Welcomed but
left stranded
Do not have a
good reception
at all
Total Number
of
Respondents
Source: Field Data, 2012 - 2013
Overall results from all the schemes indicates about 96 employees which is about
59% expressed satisfaction that there is warmly welcome for customers into all of
the social security schemes, while 26% of the respondents accepted that there were
welcomed but left stranded for long hours. About 15% of the respondents stated their
schemes to have no friendly welcomes at all. The levels of each scheme on this
aspect shall is indicated and discussed in the next parts of this study.
4.2.2
Decentralisation
The operations of most of schemes have been simplified by the steps taken by those
schemes to decentralise their offices to zones and regions up country.
51
Table 4.9: Opinions with Regard to Having Decentralised Offices
Opinions
PSPF
PPF
NSSF
GEPF
LAPF
NHIF
Total
Percentage
(%)
Prefer
having 23
16
20
13
15
16
103
63
10
18
12
10
9
61
37
26
38
25
25
25
164
100
zonal offices
Prefer
the 2
centralised
office
Total Number 25
of
Respondents
Source: Field Data, 2012 – 2013
Of the members interviewed, 142 out of 164 (94%) were very positive for social
security schemes to have their head quarter offices decentralized as per Table 4.9.
Other schemes though have decentralised their activities to their regional offices,
still a lot of transactions are performed at the headquarters. For example the PSPF
regional offices have very minor roles on accomplishing services for their members
and are being used as delivery stations on which members have to dispatch there
their complaints or claims to be forwarded to the head quarter. One of the employee
from Singida region complained that PSPF’s regional offices do not help anything in
settling their grievances rather than being used to forward members’ claims. Likely
LAPF zonal offices were complained to be inactive on the process of accomplishing
members claims without consulting the headquarter. Good evidence can be seen that
in most of the LAPF benefit claim forms, zonal offices have spaces to fill into those
forms as an affirmation that the respective forms have been delivered to the zonal
office by the claimants.
52
4.2.3
Processes and Procedures of Effecting Members’ Benefits
The study looked on the processes and procedures applicable when members of the
social security are to institute their claims to their respective schemes. This was done
in order to establish what is the attitudes of the social security members on those
processes and to find out which of the scheme seems to be having more favourable
processes and procedures which members are served with leading to unnecessary
complains.
Table No. 4.10: Respondents Comments on Effectiveness of Social Security
Schemes’ Procedures and Processes
Opinions
PSPF PPF NSSF
GEPF LAPF
NHIF Total
Percentage
(%)
Procedures and
9
15
26
16
6
11
83
50
3
4
0
6
5
5
23
14
13
7
12
3
14
9
58
35
25
26
38
25
25
25
164
100
processes are
good
Doesn’t
understand if
procedures and
processes are
good
They are not
good at all
Total
Respondents
Source: Field Data, 2012 – 2013
Overall study of all the schemes indicates that the processes and procedures of
effecting members benefits are average because table 4.10 above indicates 50% of
the respondents suggest the procedures and processes are good. Those denied the
53
procedures and processes to be good were 35% of the respondents. There were 14%
of respondents also who did not understand if the procedures are good or not.
Though this has been stated well at the nest parts of this study, the researcher has
considered each scheme and 52% of interviewed members of PSPF, complained that
the processes and procedures of effecting their claims as not good. There were also
complains from LAPF 56% and NSSF 31%. There were few complains from those
covered by GEPF and PPF. Employees covered under GEPF were proud of the Fund
and confirmed that GEPF has improved to the extent of accomplishing benefit
payment within a week upon being lodged with clear information. 36 percent of
NHIF employees (9 out of 25) complained for the processes and procedures. The
main complaint was that medical identification cards for the new registered members
have been taking too long to be delivered to those members making them to start
entering into extra medical expenses. One of the NHIF member met by the
researcher at the Saba Saba Exhibition claimed to be coming from Tabora had to
stated thus:
“Tatizo la NHIF ni ucheleweshaji wa kadi. Mimi nilijaza fomu kwa ajili
yangu ilinichukua mwaka mzima kupata kadi ya matibabu. Nilipopata
mtoto tena nikajaza kadi na nikapeleka picha za mtoto lakini pia
ilinichukua zaidi ya miezi sita kupata kadi yake(NHIF Member,
Personal Communications, Saba Saba Exhibition 2013).
Literally, the respondent complained NHIF had a problem of delaying to issue
medical insurance cards to newly registered members. The researcher did not
54
succeed to hear complains from existing members on the processes and procedures
of accessing medical facility benefits.
With regard to NSSF, all the members interviewed complained about the process of
claiming withdrawal benefit. At the time this benefits was being provided
beneficiaries were required to wait for a period of six months before their claims
could be lodged to NSSF. This was complained to be grossly unfair as it left
members to a situation of serious economic distress.
4.2.4
The use of New Information and Communication Technology
The study revealed that almost all social security schemes have been using new
information and communication technology in their operations. Each of the social
security schemes is well equipped in the use of new technology. The researcher
observed the schemes offices, starting from the reception, to have reduced in great
extent the use of paper work as each of the officer’s desk there was a computer and
an officer was utilising it. Most offices have installed Local Area Network (LAN)
systems which enable them to communicate internally without being involved in
unnecessary physical movements. There are also inter-branches communications
through internet and the use of telephone. In one occasion, at PPF head office, the
researcher witnessed an officer communicating to PPF Mwanza branch through a
phone to ensure that a member’s query is settled.
All in all, almost all schemes have launched websites through which their members
are capable to access information with regard to their schemes. Information
55
displayed in the websites include annual reports, formulas of calculating a number of
benefits and enabled members portals through which members are capable to access
information and particulars with regard to their membership status.
4.3 How do these schemes promote and protect the interests of their members
All the schemes have mission and core value statements indicating that they have
ultimate objectives of promoting and protecting members’ interests.
however viewed through a number of scenarios
These are
which the schemes are doing for
their members. The scenarios include the availability and suitability of benefits
available at the respective scheme and how the scheme is doing in improving the
scheme’s sustainability status.
Looking on the first scenario with regard to availability and suitability of benefits in
the respective schemes as indicated in Table 4.11 one finds that there are common
benefits into most of social security schemes which are old age pensions, survivors
and withdrawal benefits. Death benefit is the least considered among the benefits
found in the schemes, probably due to the fact that employers used to provide
prompt assistances in case of death events to their employees or employee’s family
members.
The study revealed further that employee members of the social security schemes
have different attitudes with regard to the available benefits suiting their desires from
the social security schemes. Taking data at Table 4.11 above of the interviewed 164
employees of the social security schemes 80 of them 48 % were interested with
56
qualifying to old age pensions (retirement benefits) as their first preference benefit
rather than any other benefits. However the majority of these interviewees were
those coming from PSPF, PPF and LAPF schemes. 58 employees out of 164 (35%)
were conscious with withdrawal benefit as their first preference benefit giving
backing factor that reaching a retirement age has become an issue these days and the
human being lifespan is collapsing every day. When asked randomly on their second
and third preferences, still old age and withdrawal benefits were considered the best.
Table 4.11: The Distribution of Beneficiaries Choice Regarding the Benefits
S/N
Benefit
Category
1st Preference
2nd Preference
The 3rd Preference
No. of
respond
ents
Percent
age
(%)
No. of
Respon
dents
Percen
tage
(%)
No. of
Respon
dents
Percenta
ge (%)
1
Old-age
80
49
53
32
42
26
2
Survivors’
pensions
0
0
10
6
8
5
3
Death benefit
0
0
5
3
6
4
4
Funeral Grant
0
0
13
7
8
5
5
Maternity
benefits
0
0
5
3
10
6
6
Employment
injury/invalidity/
disability
4
0
14
8
15
9
7
Health insurance
6
3
14
8
7
4
benefits
8
Education
benefits
12
7
16
10
20
12
9
Gratuity benefit
4
2
-
-
3
2
10
Withdrawal
benefit
58
35
34
-
45
27
164
100
164
100
164
100
Total Respondents
Source: Field Data, 2012 – 2013
57
The study also looked as to which social security scheme would be preferred the
most by members of the social security schemes.
Table 4.12: Preferences of a Social Security by Employees Members of the
Schemes
1st Preference
2nd Preference
The 3rd Preference
No.
(%)
No.
(%)
No.
(%)
PSPF
42
26
44
27
25
15
PPF
30
18
38
23
40
24
NSSF
31
19
20
12
11
7
GEPF
20
12
14
9
30
18
LAPF
23
14
10
6
18
10
NHIF
18
11
52
32
40
24
Total Respondents
164
100
164
100
164
100
Scheme
Source: Field Data, 2012 – 2013
Table 4.12 establishes that from the randomly interviewed employees from all the
schemes it was revealed that 42 out 164 (26%) of interviewed members prefered
PSPF. The researcher found this to be relevant because, to their understanding, being
at PSPF, they would get huge amount of pensions when they reach retirement age as
per Table 4.13. Furthermore, through PSPF employers remits higher percentage of
the employee’s contribution than an employee to the Fund.
PSPF was followed by NSSF and PPF by 31 and 30 members, each out of 164 (19%
and 18% respectively) as first preferred Funds. The reasons of preference given
were that PPF provides for education and withdrawal benefits which most members
would like they be included in their schemes. NSSF also provides withdrawal and
58
health insurance benefits which are important in curbing unexpected health and
economic distresses. The second preferred schemes were NHIF and PSPF.
Table 4.13: Pensions Amount from the Existing Social Security Schemes
(Retiring at the Salary of TZS 900,000/- Same Service Period)
Scheme
Amount of Lumpsum Pension
Monthly Pension
PSPF
37,200,000
200,000
PPF
13,500,000
270,000
NSSF
6,480,000
270,000
GEPF
Nil
Nil
LAPF
37,200,000
200,000
NHIF
Nil
Nil
Source: Field Data, 2012 – 2013
The second scenario in the study looked with regard to this research question was
how the scheme is doing in improving the scheme’s sustainability status and in doing
that investment activities of the schemes were considered. The study found that
almost all the social security schemes were involved in investment activities. Some
of the schemes have investment policy documents while others have adopted the
Tanzania Investment Policy. Most of schemes claimed that investment activities are
core in ensuring that the Funds’ ability of fulfilling the desires of their members are
sustainable and thus extending social protection issues to a wider coverage. These
schemes invest their funds in a number of ways as provided in most of their annual
reports. Mostly these schemes invest in four categories of fixed income assets,
properties, equities and licensed collective schemes.
59
Table 4.14: Awareness Regarding Social Security Schemes Investments by
Beneficiaries
Investment
PSPF
GEPF
PPF
NSSF
LAPF
NHIF
Total
(%)
2
11
31
5
8
60
37
Awareness Level
I know there is 4
investment
Not sure
16
15
6
5
12
14
68
41
I don’t know
5
8
9
2
8
3
36
22
Total
25
25
26
38
25
25
164
100
Respondents
Source: Field Data, 2012 – 2013
The status of the awareness of members with regard to schemes’ investments for all
schemes and each scheme is as indicated in the Table 4.14. Generally, the awareness
level of beneficieries on the investment of their schemes is low because those not
sure if their schemes invest at 41% which comprise of 68 respondents out of 164.
Those who did not know if their schemes invest are 36 which is about 22%. This
implies that about 63% of 164 respondents are not aware if their schemes invest
funds from their contributions.
For the purpose of attempting to establish the awareness of each scheme’s
beneficiaries as stated also at chapter five, the study revealed that NSSF and PPF
beneficiaries are more aware that their schemes invest (Table no. 4.14). From NSSF
31 out of 38 employees members (82%) interviewed are aware that their scheme
60
invests from their funds. For PPF 10 (40%) out of 25 employees interviewed were
found to be aware that PPF invest from their funds. Those members mentioned these
schemes to be among the sponsors of constructing the Kigamboni bridge. However
the majority of members from other social security schemes were not sure if their
schemes invest through their funds. With general comments some respondents were
against to such investments and blamed as members they were to be consulted on
issues relating to investment of their funds.
4.4 What are Social Security Schemes Doing to Sensitise People on the
Functions of Social Security in Tanzania
Lack of awareness of the activities and operations of social security schemes, which
may be due to limited marketing efforts lead to poor level of competitiveness of the
social security schemes in Tanzania. If there is no public education by the social
security schemes the issue of social protection to all in Tanzania remains at isolation.
Dissemination of information by the social security schemes in Tanzania is core not
only for the expansion of those schemes but also for extending coverage of social
protection due to the current trend of liberalizing social protection issues within
Tanzania.
Among the issues this study considered was to look on the issue of sensitisation
activities by the social security schemes. The study reveals that almost all the social
security schemes are conducting sensitisation activities which include radio and
television advertisement programs, participation in National exhibitions such as Saba
Saba, Nane Nane and Public Service Week. The most effective sensitisation
activities being performed by the schemes include conducting seminars and
61
educational programs to their stakeholders
and the public at large, conducting
conferences for members and visiting their members and prospective members to
educate them about the activities of the respective social security schemes.
Table 4.15: Scheme Members’ Awareness on Sensitation Activities
Investment
PSPF
Awareness Level
I know there is
GEP
PPF NSSF
F
LAP
NHI
F
F
Total
(%)
5
2
9
20
8
2
46
28
16
15
6
5
12
13
67
40
I don’t know
4
9
10
13
5
10
51
32
Total
25
26
25
38
25
25
164
100
Sensitation and
have attended
I know there is
Sensitation but
have not attended
Respondents
Source: Field Data, 2012 – 2013
Getting the feedback of this from this field study, of the interviewed members of
social security schemes 46 out 164 (28%) respondents were aware of sensitization
activities of the social security schemes and confirmed to have participated to them
(Table no. 415). A large number of the interviewees, 40 out of 164 respondents
(40%) suggested to to know about their schemes sensitasation activities. However
32% of the respondents, who denied to have knowledge about such activities which
is about (Table No.4.15). Those having knowledge when interviewed referred
television advertisements as the main source of sensitation activities by social
security schemes.
62
4.5
Discussions of Findings Related to Each Scheme’ Competitiveness
4.5.1 The Social Security Schemes Current Profiles in a Nutshell
For the purpose of getting the current profiles of the social security schemes the
researcher was capable to have references from a number of literature and through
the field survey information which have been presented at parts 4.1 to 4.4 at this
chapter. Data obtained are not consistency because they depended on their
availability at the respective social security schemes during the time of survey. Most
of the schemes have information through their annual reports up to 2011.
Briefly Table 4.16 provides a general overview of the social security schemes. The
total number of members to all these schemes as by the year 2011 is 1,626,914.
Three schemes, GEPF, PSPF and PPF are accountable to the Ministry of Finance,
while the NSSF is accountable to the Ministry of Labour. The NHIF and LAPF are
accountable to the Ministry of Health and Social Welfare and Prime Minister Office
Regional and Local Government respectively. With regard to coverage, previously
the NSSF and PPF were the only schemes which covered the private sector
employees.
Currently after the enactment of the SSRAA, all schemes cover employees from both
private and public sectors. With regard to contributions rates, employees registered
by PSPF, GEPF, PPF and LAPF contribute 5% of their gross salaries, while
employers contribute 15% of the employees’ salaries. For the NSSF, both employees
and employers contribute 10% of the employee gross salary. The NHIF registered
employees contribute 3% while their employers also contribute 3%. With regard to
their establishments and regardless a number of statutory changes the GEPF and
63
LAPF are the oldest schemes while the PSPF and NHIF are the most recent schemes.
These schemes are considered individually.
PPF
1978
Private
and Public
sector
workers
PSPF
1999
Central
Governme
nt
Employees
LAPF
1944
Local
Governme
nt
Employees
NHIF
2000
Central
Governme
nt
Employees
GEPF
1942
Police,
military
and
Governme
nt contract
workers
Current
scheme for
all employees
except
police/army
and
politicians
In 2002
eligibility
extended to
private sector
workers
Mostly
restricted to
central
Government
employees
Private sector
and
government
employees
521,629
10
20
Health
insurance
scheme for
central
government
employees
only
Scheme for
public sector
workers not
yet appointed
as permanent
members
10
Accountable
Ministry
Total
Private
sector
workers
Employ
er
Employ
ee
Previous
Core
Coverage
1964
Active
Members by
the year 2011
Year
Established
NSSF
Contribution
Rate
Fund Status
Name
Table 4.16: Profile of Social Security Institutions in Tanzania Mainland
Ministry of
Labour
180,049
15
5
20
Ministry of
Finance
334,255
15
5
20
Ministry of
Finance
80,491
15
5
20
Prime Minister
Office
Regional and
Local
Government
468,611
3
3
6
Ministry of
Health and
Social Welfare
41,879
15
10
*Total members for all schemes by the year 2011 is 1,626,914
Source: Available literature and Field data, 2013
25
Ministry of
Finance
64
4.5.2 Public Service Pension Fund
4.5.2.1 The Legal Framework Governing the Scheme
The Public Service Retirement Benefits Act No. 2 of 1999 was enacted to provide
for the establishment of the PSPF and to repeal some older laws, such as the Pension
Ordinance of 1954 which was enacted to regulate retirement benefits to civil
servants in Tanzania Mainland. PSPF started operating in July 1999 and for the first
five years of its existence, no benefits were paid. Benefit payment started in July
2004.
According to Public Service Retirement Benefits Act the PSPF is run by a Board of
Trustees which comprises of the Chairman who is the Permanent Secretary of the
Ministry of Finance and other members. The Board’s functions include to manage
and administer the Fund, invest, disbursement of pensions and other benefits, advise
the Minister, appoint other employees of the Fund and do all other things proper for
the administration of the Fund. The PSPF also has the Director General who is the
appointee of the President of the United Republic of Tanzania. The Director General
is the Secretary of the Board and subject to the directions of the Board is responsible
for the day to day administration of the Scheme. The tenure and other terms with
regard to the appointment of the Director General are under the discretion of the
President through the instrument of appointment.
With regard to constitutionality of PSPF, there is very low understanding of the
scheme members on the constitutionality of the scheme because of 25 PSPF
members reached during the field survey, only 4 (16%) of them claimed to be with
understanding on the constitutionality of their scheme’s governance issues which
65
indicates that members are not involved on issues relating to scheme’s corporate
governance (Table No. 4.17). About 21 PSPF members reached which is 84% denied
to have understanding of the constitutionality of the PSPF. The applied to employers
those have registered their employees to PSPF whereby only 2 out of the 8 reached
employers claimed to have understanding on the constitutionality of PSPF which is
about 25% implying that employers do not care on the issues of governance in the
scheme they remit their employees contributions.
Table 4.17: PSPF Employees and Employers Opinion with Regard to the
Scheme’s Constitutionality
Opinions
Understand the
Employees
Employers
Respondents
Percentage
Respondents
Percentage
4
16
2
25
21
84
6
75
25
100
8
100
constitutionality of their
scheme
Do not understand the
issue of constitutionality
of their scheme
Total Number of
Respondents
Source: Field Data, 2012 - 2013
With regard to benefits payable by PSPF, through the provisions of law, the PSPF is
responsible for the payment of benefits to any civil servant who retires or terminates
service. The law provides the years of service taken into account in the pension
formula to include the whole period the person was in government service, not just
service since July 1999. PSPF covers the permanent and pensionable employees of
66
central government and the contribution rate is 20 per cent of gross salary (5 percent
for employers and 15 per cent for employees). PSPF is a leading scheme in
providing satisfactory benefits as has been indicated at Table 4.14.
4.5.2.2 Operations
PSPF’s core values statement recognises accountability, responsibility, integrity,
diligence creativity, promptness, responsiveness; and courtesy to all as the leading
values for its performance. The core values statement has been the basis on the
operations of the PSPF scheme. The study looked on the scheme’s operations in a
number of criteria which included customer care issues, decentralisation, processes
and procedures of effecting members’ benefits and the use of new technologies in
the performance of day to day duties.
Firstly, with regard to customer care, on arriving at the PSPF’s headquarter’s office,
you find two staff at the main entrance; they welcome you and friendly they inquire
your problem. They do not ask if you have previously arranged for an appointment
to visit their office. They just provide directives and record in the computer to
capture the number of customers visiting their office.
Table 4.18: Opinion of PSPF Beneficiaries Regarding Customer Care
Opinions
PSPF
Percentage (%)
Warmly welcomed and effectively attended
23
92
Welcomed but left stranded
2
8
Do not have a good reception at all
0
0
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013
67
The reception office has enough space to accommodate more than a hundred
customers at once and has about sixty seats for customers. Customers do not stand in
queues rather they are issued with piece of paper containing a number which is read
loudly to inform the customer concerned to go to the desk which he or she would be
attended. This is well supported by field data which supports that customers are
warmly welcome at PSPF offices as indicated in Table No. 4.18 above. The study
reveals that about 92% of interviewed 25 PSPF respondents were satisfied by the
manner which PSPF welcomed them which contemplate that PSPF has good
customer care.
The other aspect which the researcher considered on the operations of PSPF was on
the decentralisation of office. PSPF has decentralised its operations in the Tanzania
Mainland regions. Plus the headquarter office situated in Dar-es-Salaam but there
offices in 21 regions. Though most of the activities with regard to claims are
processed at the headquarter in Dar-es-Salaam the regions offices play a major role
of direct communications to employers and members at respective regions.
Table 4.19: Opinions Regarding PSPF having Decentralised Offices
Opinions
PSPF
Percentage (%)
Prefer having zonal offices
23
92
Prefer the situation as it is
2
8
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013
68
PSPF discourages its members travelling from up country to the headquarter for the
purpose of minimising expenses which their members might incur through transport
and accommodation in Dar-es-Salaam. Field survey has revealed that PSPF members
prefer to have zonal offices because 23 out of 25 interviewed PSPF members support
this as indicated in Table 4.19.
The study also considered PSPF’s operations with regard to procedures and
processes of effecting beneficiries’ benefits. The study established that for a claim of
any benefits from PSPF employers play main roles. PSPF offers seven benefits
which are old age (retirement) pension, old age gratuity, survivors, death gratuity,
funeral grant, disability and withdrawal benefits. For each benefit’s claim the
employer initiates the process by informing the employee and submitting the
employee’s information to PSPF. However in case of survivors and death benefits,
heirs are provided those benefits through the appointed administrators under the
Probate and Administration of Estate Act, Cap 352 after they have undergone the
court processes on succession and inheritance matters.
In claiming most of benefits employees concerned play minor roles as it is their
employers who are required to notify the PSPF of all the retirements and submit all
the information with regard to concerned retirees or withdrawers. The employer also
issue PSPF registration forms for new employees to join the Fund. Employees are
only needed to submit to the employer some of information which includes their
salary slips for their last months of employment and probably a letter of
employments if it happen employers do not have such letters in their official records.
69
Accordingly (PSPF employee, Personal Communications at Sabasaba Exhibition,
2013) PSPF have been improving the process of issuing benefits. It takes less than 3
months to remit pensions (lump sum amount) to the retiree from the date they
receive the particulars of such retiree from the employer. This applies to paying
other benefits also. However PSPF admits that in some circumstances payments are
delayed and this is mostly due to unavoidable circumstances such as submission of
incomplete members’ particulars which is usually caused by employers (PSPF
Employee, Personal Communications at Sabasaba Exhibition, 2013).
PSPF are also observed to be transparent. They have displayed into brochures and
their website all the information with regard to calculations of member’s benefits
and the processes involved. Member become aware of those information without
bothering to visit the office and likely are capable of understanding their entitlements
through computing them by their own by studying the PSPF formulas of calculating
benefits.
Table 4.20: PSPF Members’ Comments on Effectiveness of Procedures and
Processes
Opinions
PSPF
Percentage (%)
Procedures and processes are good
9
36
Doesn’t understand if procedures and processes are good
3
12
They are not good at all
13
52
Total Respondents
25
100
Source: Field Data, 2013
70
However, field study establishes members to be against the procedures and processes
of PSPF in effecting their terminal benefits. The study reveals that of 13 of 25
(52%) PSPF members interviewed complained that procedures and processes of
effecting members benefits claims are not good at all. Nine members (36%) stated
the procedures are good and only 3 of the 25 (12%) members
have stated the
procedures and processes are good (Table No. 4.20).
In the study it was also considered on the operations of the scheme through the use
of information and communication technology. PSPF which has computerised its
activities has placed with members’ portal of opening electronic accounts through
the PSPF’s website. Through such accounts they are capable of accessing important
information with regard to their membership such as the amount of their
contributions remitted to PSPF or the amount of pensions for those have qualified.
When the researcher visited the PSPF office he found most of PSPF officials are
computer friendly and perform most of their activities by using computers.
Computer uses starts at the reception room once a customer is welcome to the
PSPF’s office.
There is an installed at LAN the PSPF headquarter on which
employees are capable to interact to each other without moving out of their
respective desks. There is very minimal use of paper works. Further PSPF has
effective communication through internet between the PSPF headquarter and
regional offices (PSPF Employee, Personal Communications at Sabasaba Exhibition,
2013).
71
4.5.2.3 Promotion and Protection of Members Interests
PSPF boasts itself by claiming that it has higher reputation of protecting its members
interests. First of all, PSPF claim to be paying satisfactory amount of pensions and
other benefits to its members if compared to other schemes. The Fund states to be
favourable to its members as through the provision of the law, employers a supposed
to remit about 15 percent of the employee’s wage and the employee is supposed to
remit only 5 percent of his wage. The whole 20 percent of the employee’s wage is
supposed to be remitted by the employer because it is the employer who is
responsible for making deductions of an employee’s wage (PSPF Employee,
Personal Communications at Sabasaba Exhibition, 2013).
The investment activities of the PSPF are mainly intended to benefit its members. In
the PSPF Annual Report (2011), it is stated that net income from investment
increased to TZS 92.3 billion from TZS 60.7 billion recorded in the year 2010, an
increase of 52.1 percent. The increase was attributed by recognition of penalty
payments for late repayment of corporate loans and increase in dividend
declarations. It is stated that (Annual Report, 2011), funds from investments are also
a source of fund for paying benefits to members.
In the year 2011 PSPF paid about TZS 282 billion as benefits to its members. Of that
amount old age pension gratuity was leading as TZS 207 billion were paid to such
benefit (this benefit is paid in a lump sum amount), followed by old age pension at
TZS 42 billion and death gratuity at TZ 27 billion. Funeral grant was the least
amount paid at TZS 274 million (Annual Report, 2011).
72
Table 4.21: Awareness of PSPF Beneficiaries on their Fund’s Investments
Investment Awareness Level
PSPF
(%)
I know there is investment
4
16
Not sure
16
64
I don’t know
5
20
Total Respondents
25
100
Source: Field Data, 2013
However, the field study establish that 4 out 25 of PSPF members interviewed (16%)
are aware that their scheme invests their funds as is clearly established at Table No
4.21. 64% of PSPF members interviewed are not sure if PSPF invest their funds and
those declared not know that PSPF invest their funds was 20%.
4.5.2.4 Sensitisation Activities
In sensitization activities, PSPF are doing all what is possible to ensure that their
members and the public at large understand the importance social security and their
role to its members and the public. In this, information obtained from reveals that
PSPF has been involved in a number of sensitisation activities which include
exhibitions at Nane Nane grounds in Dodoma and the Public Service Exhibitions in
Dar-es-Salaam. PSPF is also been producing a number of brochures which circulated
at different places country wide. There are also different TV advertisements which
are intended to awake members and the public with regard to benefits provided by
the Fund.
Regardless, the sensitization activities being conducted PPF admits that their
coverage is limited by the provisions of law which previously required PSPF to
73
enroll employees at from the Tanzanian central government only. PSPF coverage is
however expected to increase after the SSRAA to has opened door that any of the
prospective employee has a right to opt the social security scheme suiting him which
is provided under section 8 of the SSRAA, 2008.
4.5.3
Parastatal Pension Fund
4.5.3.1 The legal framework Governing the Scheme
PPF was established under sections 4 and 6 of the Parastatal Pensions Act, 1978.
PPF is a contributory pension scheme catering for employees of the Central
Government and its Executive Agencies, whose terms of employment are permanent
and pensionable. PPF’s source of funds is mainly from contributions made by
employees at the rate of 20 per cent of each member’s monthly salary - five per cent
of it deducted by the employer from the member’s salary, and the remaining 15 per
cent being the employer’s contribution.
PPF also has other sources of fund which include monies accrued from investments
of the Fund, sums as may be appreciated by Parliament for the purpose of the Fund
and income and capital appreciation derived from the holding of the assets of the
Fund. PPF operates two types of schemes which are Parastatal Pensions’ Scheme
(traditional scheme) and Deposit Administration Scheme. Each scheme has different
types of benefits to its members. Under the Traditional Scheme, PPF offers old age,
disability, death, survivors, education, gratuity, and withdrawal benefits. On the
other hand, lump sum or lump sum with annuities is offered under Deposit
Administration Scheme (PPF website, 2013).
74
PPF is administered by the Board of Trustees as established under section 17 and the
First Schedule of the Parastatal Pensions Act. The Board of Trustees comprise of the
Chairman who is the Permanent Secretary in the Ministry of Finance and not less
than four and not more than eight other members appointed by the Minister.
According to paragraph 3 of the First Schedule of the PPF Act, 1978, members of
the Board have the right to continue to hold office for three years and shall be
eligible for a re-appointment. The functions of the Board include to manage and
administer the Fund, to invest, disbursement of pensions, gratuities and other
benefits in accordance with the provisions of the Act, to advise the Minister on
matters relating to the administration of the Act, to protect, safeguard and promote
the interest of the members and to do all such acts and things as the Board may
reasonably be expected to do.
Sections 7 and 22 of the PPF Act state generally that the PPF Board is responsible
for the management and control of the Fund. Previously the Board designated the
Corporation on dealing with the day-to-day administration of the Fund. However,
through further amendments of the Act, for example PPF Act’s amendments of
2001, the provision involved Corporation in the day to day administration of the
Fund was repealed and instead the Director General position, who is concerned with
day to day administration of the Fund, was created.
With regard to opinions revealed from this study, PPF members were asked to
comment on their understanding on issue of the constitutionality of their scheme and
only 6 out of 26 members which is 23% of the members as per Table No. 4.22
75
claimed to understand the way which their scheme is constituted implying that the
issue of the constitutionality of their scheme is not a priority to them and thus
members are not eligible to intervene in any way when it happens issues of scheme’s
good governance are not observed. There is a different understanding on the part of
employers those have registered their employees to PPF because 5 out of 8 reached
employers, making 63% responded to have understanding on the constitutionality of
the scheme.
Table 4.22: Members and Employers Opinion with Regard to PPF
Constitutionality
Opinion
Employee Members
Response
Understand the
Percentage
Employers
Response
Percentage
6
23
5
63
20
77
3
37
100
8
100
constitutionality of their
scheme
Do not understand the
issue of constitutionality
of their scheme
Total
Number
of 26
Respondents
Source: Field Data, 2012 - 2013
4.5.3.2 Operations
PPF’s core values statement advocates PPF to achieve its vision through a developed
corporate culture in core values which include integrity, commitment, teamwork and
innovativeness. As for other schemes, this core values statement has been the base of
operations of the PPF Scheme. Through this core value statement issues with regard
to customer care, decentralisation, processes and procedures of effecting members’
76
benefits and the use of new technologies in the performance of day to day duties
were considered in this study.
With regard to customer care, the researcher visited the PPF headquarter office and
the Eastern and Central zonal office at Morogoro. PPF’s officials have positive
attitudes to their customers. When a customer steps in she or he is inquired for what
assistance should be provided to her or him in a friendly manner. The reception staff
explores a customer’s problem and directs her or him to the relevant section for
assistance. There are minimal queues of customers in the PPF offices and this has
been stated simply due to the system of enabling PPF customers access their basic
information through electronic means wherever they might be. The field survey also
proves PPF beneficiaries.
Table 4.23: Opinion of PPF Beneficiaries with Regard to Customer Care
Opinions
Responses
Percentage (%)
Warmly welcomed and effectively attended
16
62
Welcomed but left stranded
6
23
Do not have a good reception at all
4
15
Total Number of Respondents
26
100
Source: Field Data, 2012 - 2013
With regard to decentralization, PPF has decentralised its operations in the Tanzania
Mainland regions. Plus the headquarter office situated in Dar-es-Salaam PPF has
about five zonal offices country wide. PPF has decentralized almost all activities
with regard to their members at zonal offices and thus the headquarter plays a minor
77
role. This has been enhanced by the use of information and communication
technology (ICT).
Table 4.24: Opinions with Regard to PPF having Decentralised Offices
Opinions
Respondents
Percentage (%)
Prefer having zonal offices
16
62
Prefer the situation as it is
10
38
Total Number of Respondents
26
100
Source: Field Data, 2012 - 2013.
PPF beneficiaries support to have their office decentralised into zonal offices
because of 16 of 26 PPF members reached, which is 62% prefer PPF to have its
office decentralized as indicated in Table 4.24.
For the processes and procedures of effecting members’ benefits in almost all stages
of initiating claims from PPF employers and employees concerned play main roles.
For some of the benefit claims payments to members are made by employers
themselves. For example if it happen an employee member of the PPF owe an
amount of money to the employer, the employer is entitled to deduct the same from
the amount to be paid by PPF to the beneficiary. That, the amount of money to be
passed through the employer it is rationale is to enable the deduction exercise to be
accomplished. In some cases, employees are provided with filled forms to submit
them to the PPF office (zonal offices) and in some cases, employers have discretion
to submit them, especially when it happens an employee owe money to the
employer.
78
It takes about one month for PPF to pay the beneficiary his benefit when it happens
all forms relating to the claim are clear. PPF admits that in some circumstances
payments are delayed and this is mostly due to unavoidable circumstances such as
submission of incomplete members’ particulars which is usually caused by
employers and employees themselves (Juma Mwita, Personal Communications at
Sabasaba Exhibition, 2013). To avoid such delays PPF has displayed into their
website all the information with regard to claim forms needed to be filled when a
prospective beneficiary is intending to lodge a claim for any of PPF’s benefit.
Field research also confirms the majority of PPF members are satisfied with
procedures and processes of effecting their benefits as 58% of the reached
respondents stated the procedures and processes to be good (Table 4.25).
Table 4.25: PPF Members’ Comments on Effectiveness of Social Security
schemes’ Procedures and Processes
Opinions
Respondents
Percentage (%)
Procedures and processes are good
15
58
Doesn’t understand if procedures and 4
15
processes are good
They are not good at all
7
27
Total Respondents
26
100
Source: Field Data, 2012 - 2013
On the use of new communication technology, most of officials at PPF use
computers and in general PPF has also computerised its activities. As other schemes,
PPF members are entitled with a portal of opening electronic accounts through the
79
PPF’s website. Through such accounts they are capable of accessing important
information with regard to their membership such as the amount of their
contributions remitted to PPF by their employers. The website also provide a lot of
information of the fund which members can access freely.
4.5.3.3 Promotion and Protection of Members Interests
Previously PPF was mandated in providing benefits to employees from the parastatal
organizations only. However after the privatisation of most of public sector
corporations, the government of Tanzania allowed PPF to have employees members from the private sector employers also. In his statement within the PPF
Annual Report (2010), the Director General states that the Fund continued to
enhance its marketing capacity for its zonal offices with a view of recruiting more
members. As a result of the efforts and strategies employed, the Fund recruited
59,217 new members during the year 2011 as compared to 40,735 members
recruited in 2010.
PPF considers itself to be favourable to its members as through the provision of the
law, it allows flexibility to employer and employees to negotiate on the percentage
of contributions. Some employers agree that with their employees that employer has
to contribute 15 percent of the employee’s wage and the employee contributes 5
percent of his wage. Some employers agree with their employees that each has to
contribute 10 percent. As a practice most private sector employers and employees
opt the later scenario (Juma Mwita, Personal Communications at Sabasaba
Exhibition 2013).
80
PPF is used to invest its fund in a number of ways. In the PPF Annual Report (2011)
it is provided that the Fund’s investments portfolio remained within four categories
of fixed income assets, properties, equities and licensed collective scheme. Total
investments during the year 2011 were TZS 836 billion which earned the Fund a net
investment income amounting to TZS 91.5 billion. Funds coming from investment
form a part of funds paid to beneficiaries and the same is invested in most of public
projects which benefit the whole of the Tanzanian public.
Table 4.26: Awareness with Regard to PPF’s Investments by Beneficiaries
Investment Awareness Level
Respondents
Percentage (%)
I know there is investment
11
42
Not sure
6
23
I don’t know
9
35
Total Respondents
26
100
Source: Field Data, 2013
Field research sought members opinion with regard to their awareness on PPF’s
investment activities and about 42% of the respondents revealed to be aware that
PPF invests on their fund, while 35% respondents (Table no. 4.26) do not know that
PPF invest on their funds, implying that PPF has been involving their members to
know how their contribution funds are being utilised.
With regard to benefits paid in the year 2011 PPF paid about TZS 71 billion as
benefits to its members. The highest amount was paid for monthly pension
81
amounting to TZS 27 billion, followed by commuted pensions at TZS 14 billion and
gratuity benefit was the least amount paid at the rate of TZS 60 million (PPF Annual
Report, 2011).
4.5.3.4 Sensitisation Activities
With regard to sensitisation activities PPF conducts annual conferences which
involve its stakeholders and any other people interested in social security matters.
For example the last year’s Annual Conference was held in Arusha. The theme of the
Conference was 'Social Security: Driver of social and economic development' (PPF
website, 2013). In that Conference PPF members and employers registered under
PPF were given priority implying involvement of PPF relevant stakeholders.
PPF also conducts some seminars by targeting a number of their members from
particular employers each year. For example when organizations, whether public or
private, are established PPF used to go there and educate employees all issues
relating to the Fund. Some of the public organizations which PPF conducted a
seminar to its employees is the Fair Competition Commission, Fair Competition
Tribunal and Tanzania Bureau of Standard (Juma Mwita, Personal Communications
at Sabasaba Exhibition, 2013).
PPF is also involved in different short break television advertisements in which some
activities of the Fund are being disseminated to the public. PPF is among the
sponsors of the popular known Independent Television (ITV) program known as
“Sports Kizaaza”. However it is well known as to how the program relate to social
security issues.
82
The PPF’s website is also used in disseminating most of information relating to the
operations of the Fund that enabling not only members but also the public at large to
be capable of understand the PPF and social security issues at large.
4.5.4
National Social Security Fund
4.5.4.1 The legal framework Governing the Scheme
The NSSF, which replaced the National Provident Fund (NPF), was established by
the Act of Parliament No. 28 of 1997. As per its establishment Act, NSSF is a
compulsory scheme providing seven long and short term benefits. Long term
benefits include retirement, invalidity and survivors’ pensions while short term
benefits include funeral grant, maternity, employment injury and health insurance
benefits. NSSF covers employers and employees from private sector, government
ministries and departments employing non-pensionable employees, parastatal
organizations, self-employed or any other employed person not covered by any other
scheme and any other category as declared by the Minister of Labour (Section 6
NSSF Act, 1997).
NSSF is financed through contributions at the rate of 20% of employees’ 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%. As revealed from
its official website, NSSF is a fully funded scheme running under defined benefit
principles. All funds collected are wholly invested for the purpose of financing
benefit payments (NSSF website, 2013).
83
The NSSF is being managed by the Board of Trustees whose members comprise of
the Chairman who is the appointee of the President and other members as stipulated
in paragraph 2 of the Second Schedule of the NSSF Act. The provision establishes
the duration and terms upon which the Chairman and other board members are
required to serve is three years and may be eligible for reappointment. The functions
of the Board includes to formulate, implement and review the policy relating to the
Fund, to control and administer the Fund, invest monies available in the Fund,
provide technical assistance and advisory service for the purposes of promoting
social security programmes; and do all such acts for efficient administration of the
Fund.
According to section 4 of the NSSF Act, NSSF has the Director General who is
appointed by the President. The Director General is referred as the Chief Executive
Officer of the Board and oversees the daily operations of the Fund. Beside such core
function the Director General under the NSSF Act has a wide discretion relating to
the Act. The NSSF Act also establishes an office of Social Security Appeals
Tribunal referred as the Appeals Tribunal which has jurisdiction to adjudicate
appeals against decisions of the Director General on claims for benefit. The Appeals
Tribunal consists of a chairman who is a lawyer, and two other members with
experience in social security matters. The chairman and members of the Tribunal
are appointed by the Minister (Section 83 NSSF Act, 1997).
Beside the Appeals Tribunal the NSSF Act has established the Medical Appeals
Tribunal which adjudicates on appeals on medical questions relating to benefit
84
claims. The Medical Tribunal consists of a Chairman and two members, all of whom
are experienced medical practitioners and are appointed by the Minister (Section 84
NSSF Act, 1997).
Table 4.27: Members and Employers Opinion with Regard to NSSF
Constitutionality
Opinion
Understand the
Employee Members
Employers
Response
Percentage
Response
Percentage
12
32
8
100
26
68
0
0
26
100
8
100
constitutionality of their
scheme
Do not understand the
issue of constitutionality
of their scheme
Total Number of
Respondents
Source: Field Data, 2013
Among the schemes, NSSF is revealed to have more active registered employers in
understanding the constitutionality of the scheme. While a 100% of the reached 8
employers registered by NSSF showed to have understanding on the constitutionality
of this scheme, 68% of the 38 reached employees registered by NSSF responded to
have no understanding of the their scheme’s constitutionality as indicated in Table
No. 4.27 above. This finding implies that, while employers those have registered
their employees with NSSF are very concerned with the issue of constitutionality of
the scheme, their employees have less concern implying that they consider to have
no any impact on the issues relating to the scheme’s governance.
85
4.5.4.2 Operations
NSSF’s core values statement provides that the fund will provide services to its
members and the general public on the basis of respect on the right of both internal
and external customers. Issues of integrity, trustworthiness, innovation and
techniques to improve efficiency and productivity, promptness in the delivery of
services to internal and external customers, reliability, high levels of dependability
and confidence are incorporated in the core value statement. There are also issues of
accountability on the actions, deeds and the spirit of teamwork.
Through the mentioned core value statement elements the study looked on the issues
of customer care, decentralization of the Fund’s activities, processes and procedures
of dealing with members’ claims and the use of new communication technology to
establish the status of the operations of the NSSF. Regarding to customer care issues,
the researcher succeeded to visit the NSSF headquarters office and one of its
regional office (Kinondoni NSSF Regional Office). The NSSF office at the
headquarter is cool and there are minimal customers who go there for NSSF benefit
claims.
Visitors and NSSF customers are friendly welcomed at the head office. The
reception is well equipped and visitors do not take time to be attended as compared
to
up
country
offices
(Nelson
Mlandali,
Martin
Mwakyusa,
Personal
Communications, 2012). The head office has control over customers’ queues and in
most cases such queues are found at the regional and district NSSF offices (NSSF
Members, Personal Communications, 2012).
86
Table 4.28: Opinion of NSSF Beneficiaries with Regard to Customer Care
Opinions
Respondents Percentage (%)
Warmly welcomed and effectively attended
18
47
Welcomed but left stranded
12
32
Do not have a good reception at all
8
21
Total Number of Respondents
38
100
Source: Field Data, 2012 - 2013
Other NSSF members also commented on the issue of customer care in their scheme
and the results indicates that 47% of the 38 reached members stated to have been
warmly welcomed and were effectively attended, while 32% of those members
stated to have been welcomed warmly but left stranded. 21% of those members
stated NSSF to lack good reception at all (Table No. 4.28)
On decentralization, NSSF has decentralised its operations in the Tanzania Mainland
and almost all regions have NSSF offices and in some cases districts which seems to
have an outstanding number of NSSF members are entitled an office within the
District. Currently NSSF has about 23 regional offices and 14 district offices in
Tanzania Mainland. As other innovative schemes NSSF has decentralized almost all
activities with regard to their members at zonal offices and thus the headquarter
plays a minor role on dealing with only complex issues.
With regard to processes and procedures of effecting members’ benefits, registration
of membership to NSSF and claims of benefits from NSSF most depend on
employees themselves. The NSSF law requires employers to register new employees
to the Fund. Most of the employers in the private sector have been ignoring to
87
register their employees to NSSF with reasons simply that employers evade to pay
their part of contributions to the Fund (NSSF Members, Personal Communications,
2012). Mostly, the process of registering to NSSF membership is initiated by either
the employer or an employee. The process starts by employer or employee to notify
NSSF of the existence of new employments and thus new employees are willing to
join the Fund. NSSF issues registration forms to employer or an employee
concerned. Those forms are filled and then returned to the NSSF which concludes
the registration by issuing membership cards.
On the part of claims to NSSF, an employee concerned goes to NSSF and informs
them about lodging claims of a relevant benefit. The NSSF after identifying the
relevancy of the claim issues a form relevant for an employee to lodge the claim.
The employee takes the form to her or his employer and the same is filled by both
the employer and employee and returned back to the NSSF ready for processing the
benefit concerned.
According to NSSF officials most of benefit claims are processed within a month
depending on the accuracy of information of the member submitted to them. The
only challenge has been the delay of some of employers to remit members’
contributions to the Fund (NSS Operations Manager, Personal Communications,
2012). To simplify the processes and procedures with regard to all the operations of
the NSSF the Fund’s website has displayed most of the essential information which
members access to understand well on all the issues relating to their claims form the
Fund.
88
Table 4.29: NSSF members’ Comments on Effectiveness of Social Security
Schemes’ Procedures and Processes
Opinions
Respondents
Percentage (%)
Procedures and processes are good
26
68
Doesn’t understand if procedures and 0
0
processes are good
They are not good at all
12
32
Total Respondents
38
100
Source: Field Data, 2012 - 2013.
Comments from NSSF members on the effectiveness of processes and procedures on
dealing with their claims reveals about 68% of the 38 NSSF reached members to be
satisfied that the procedures and processes are good while 32% commented the
processes and procedures are not good at all (Table no. 4.29). This field finding is
supplemented by personal communications (Nelson Mlandali, Martin Mwakyusa,
Personal Communications, 2012), that NSSF have open procedures which members
once fulfill what they are required to do on their part they are paid their benefits
immediately.
There was also consideration on the issue of the use of new communication
technology that NSSF uses computers into most of its activities. As other schemes
members are entitled with a portal of opening electronic accounts through the
NSSF’s website. Through such accounts NSSF members are capable of accessing
important information with regard to their membership such as the amount of their
89
contributions remitted to the Fund by their employers. The website also provide a lot
of information of the Fund which are not only for members to access but the public
at all can access easily and freely.
4.5.4.3
Promotion and Protection of Members Interests
NSSF claims to be the best scheme for private sector employees because it is an only
scheme which pays maternity benefits to female employees members registered by
the scheme. The scheme has highest number of members at a tune of 521,629
members in the year 2011 (NSSF Annual Report, 2010/2011). Under the NSSF
employers and employees remit to the Fund an equal percentage of the employee’s
wages which is 10 percent each. The employer after deducting the 10 percent of the
employee’s wage adds 10 percent as part of contribution and remits the same to the
Fund.
NSSF is also a leading scheme in investments. According to the Director General’s
statement (NSSF Annual Report, 2010/2011) as a result of investment activities,
NSSF’s investment portfolio as by 30th June 2011 had accumulated to TZS
1,216,624.50 million compared to TZS 1,029,206.18 million on 30th June 2010. The
amount reflected a growth rate of 18.2%. Likely, the investment income for that
period increased from TZS 86,453.76 million in the year 2010/11 to TZS 90,509.38
million in the year 2010/11. This reflected an increase of 4.7%.
Regardless the returns of the investment the Director General once admitted that
returns of investment have never been satisfactory due to the non performance of the
90
loan portfolio which is mainly caused by non complying borrowers and the
prolonged legal action procedures once the defaulters were taken to court (NSSF
Annual Report, 2007/2008). He also admits that the is a challenge of unfair
competition in registration of members which he provides the solution that NSSF
will continue to be a fair player despite the fact that some social security institutions
are rough players. The strength of the Fund to convince new joint and existing
members retain their membership will be on improving service delivery, improving
benefits and expanding benefits range through introduction of supplementary
benefits which meet the evolving needs of the members (NSSF Annual Report,
2010/2011).
Table 4.30: Awareness Regarding to NSSF’s Investments by Beneficiaries
Investment Awareness Level
Respondents
Percentage (%)
I know there is investment
31
82
Not sure
5
13
I don’t know
2
5
Total Respondents
38
100
Source: Field Data, 2012 - 2013
Through field survey NSSF members were considered to more aware with the
existence of investment activities in their scheme because about 82% of the 38
employees reached by the researcher commented to be aware that NSSF invest in
their funds. 13% of the 38 reached employees were not sure that the scheme invests
in their funds while 5% only claimed to have no knowledge if their scheme invests
91
on their funds (Table 4.30). This reflects that employees in NSSF are very aware that
their contributions are being utilised in investments and as supplemented by some
oral interview (Nelson Mlandali, Martin Mwakyusa, Personal Communications,
2012) there were very positive elaborations that NSSF is investing in a number of
big projects countrywide and the Kigamboni Bridge was mentioned to be among the
projects which are being financed by NSSF.
With regard to benefit payments in the year 2010/2011 NSSF paid about TZS
136,596.50 million as benefits to its members compared to TZS 110,135.33 million
in the year 2009/2010 a difference of increase of 24% (NSSF Annual Report,
2010/2011). The category of members benefits paid included withdrawal benefits
which was the leading benefit paid in terms on money in which TZS 106,221,067
million were paid, while invalidity benefit was the least benefit paid in terms on
money for which TZS 4,566 million were paid (NSSF Annual Report, 2010/2011).
However, the report does not disclose the number of beneficiaries paid generally or
to each category of benefits paid.
4.5.4.4
Sensitisation Activities
Among the sensitization activities being conducted by NSSF include enhancing
relationship of the Fund with different stakeholders for the purpose of enabling those
stakeholders disseminate information about NSSF and social protection as well. In
the year 2010/2011 a total of TZS 379.92 million was used as donations in areas of
health, education, women and children and other social causes. This includes
outdoor campaigns in the form of publicity through the use of sponsoring of major
events (NSSF Annual Report, 2010/2011).
92
NSSF also participates in major exhibitions country wide. The Fund utilized these
occasions to enhance public awareness. Among others, NSSF have been
participating in the International Trade Fair events (Saba Saba), Nane Nane
exhibitions, May Days, Investors Forums and the Civil Servants Weeks (NSSF
Annual Report, 2007/2008).
Through own observations NSSF has also been involved in the production of a
number of brochures which are distributed to different people and is also involved in
airing some of its announcements in different media including televisions short
breaks advertisements. There is an NSSF week annually on which NSSF celebrate
by conducting some competitions and other events. For example for the year
2007/2008 NSSF renovated a radiology room at the Ocean Road Cancer Institute
(NSSF Annual Report, 2007/2008).
4.5.5
Government Employees Pension Fund
4.5.5.1 The legal Framework Governing the Scheme
GEPF covers non-pensionable government employees, i.e., those who are not
eligible for membership of PSPF. The membership of GEPF mainly comprises nonpensionable police and prison officers. GEPF is a provident fund, which means that
no pension is provided. At time of retirement, death, invalidity or employment
termination, the GEPF provides for the refund of contributions paid plus
accumulated interest to the member. Members of GEPF with 12 years of service
become pensionable government employees and are transferred to PSPF and this
process involves a transfer of accumulated contributions with interest to PSPF.
93
The GEPF was established by Provident Fund (Government Employees) Ordinance,
Cap 51. This Fund is administered under the Ministry of Finance. The Principal
Secretary to the Ministry is responsible in appointing a Board of Management which
is responsible for the control and management of the Fund in accordance with the
provisions of the law and regulations made under the law. The Board consists of a
Chairman who is nominated by the Principal Secretary from Ministry and at least
two members, one of whom is a person who is capable of representing the interests
of the depositors or the satisfaction of the Principal Secretary. Section 3 of Provident
Fund (Government Employees) Ordinance provides that three of those members may
form a quorum. The appointed members hold office for such time as may be
specified in their respective appointment instruments.
The expenses of management and administration of the Fund are paid out of the
Fund. The moneys paid into the Fund, so far as practicable are invested by the
Principal Secretary to the Ministry on behalf of the Fund in such security or
securities yielding interest as the Board approves, or with the approval of the Board,
may be deposited by him in the savings bank. Subject to the directions of the Board,
the Principal Secretary keeps a separate account for the moneys of the Fund and
supplies such information relating thereto as the Board from time to time requires.
The Board submits to the President as soon as practicable after the end of each
financial year a full statement showing the working of the Fund and all claims
containing full particulars of all transactions connected with the working of the
Fund. The accounts of the Fund are audited by the Controller and Auditor General
94
and are published in the Government (Provident Fund (Government Employees)
Ordinance, Cap. 51).
GEPF members also opined about their scheme’s constitutionality and the result
revealed 88% of the 25 reached members do not understand the issue of the
constitutionality of their scheme while 12% of those members do understand how
their scheme is constituted. On the part of employers those have registered their
employees with GEPF, 87% of the 8 reached employers also claimed to have less
understanding of the constitutionality of GEPF’s scheme (Table 5.16). The
researcher observed this finding to be related directly to the provisions of law
because, the Government (Provident Fund (Government Employees) Ordinance,
Cap. 51 seems to be unclear in addressing how the current top management of the
scheme is being recruited and thus seems to be the infringement of principles of
transparency in corporate governance.
Table 4.31: Members and Employers Opinion with Regard to GEPF
Constitutionality
Opinion
Employee Members
Response
Understand the constitutionality
Percentage
Employers
Response
Percentage
3
12
1
13
22
88
7
87
25
100
8
100
of their scheme
Do not understand the issue of
constitutionality of their scheme
Total Number of Respondents
Source: Field Data, 2012 - 2013
95
4.5.5.2 Operations
The GEPF core values with regard to its operations are: accountability, transparency,
to behave like owner, result oriented, excellence and integrity. As for other schemes,
these core values within GEPF can be established in a number of its operations
aspects which include issues of customer care, decentralization of the Fund’s
activities, processes and procedures of dealing with members’ claims and the use of
new communication technology.
On the issue of customer care, the researcher himself visited the GEPF’s headquarter
office at Dar-es-Salaam and was welcomed by the receptionist. The reception office
has small space reasonably as visitors, especially members, are taken straight to
relevant desk officers dealing with their queries. The receptionist uses phones to
contact respective officers for customers and at the same time records in the
computer the number of visitors to capture their statistics. At GEPF there are no
visitors’ queue unless otherwise and that there is a television set which visitors watch
when it happen they are told to wait for few minutes.
Table 4.32: Opinion of GEPF Beneficiaries with Regard to Customer Care
Opinions
Respondents Percentage (%)
Warmly welcomed and effectively attended
13
52
Welcomed but left stranded
8
32
Do not have a good reception at all
4
16
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013
96
Opinions from reached GEPF members reveal 52% of the 25 GEPF reached
members claimed to have observed satisfactory welcome at GEPF, while 32% of
those members suggested GEPF to have no good reception at all (Table No. 4.32).
This statistics confirms GEPF to have good customer care to their customers. With
regard to decentralization, GEPF has recently decentralized its office as three offices
have been opened by GEPF in Mafinga, Mwanza and Tanga. However most of
members dealings are still being performed at the headquarter and thus employers of
the GEPF members perform more functions with regard to GEPF members and what
is submitted to GEPF as a claim is easily accomplished. According to information
obtained at the GEPF headquarter up-country offices are mostly used as offices
which claims may initially be processed before being submitted to the headquarter
for accomplishments (GEPF Operations Manager, Personal Communications, 2012).
Table 4.33: Opinions with Regard to GEPF having Decentralised Offices
Opinions
Respondents
Percentage (%)
Prefer having zonal offices
13
52
Prefer centralised office
12
48
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013
GEPF members support decentralization of their office as supported by 52% of the
25 reached members while 48% of those members prefer having centralised office
(Table No. 4.33). The respondents statistics on this were supplemented by oral
testimony by some of them who testified that it makes no difference having or not
97
having zonal offices because to them information technology has simplified the
activities of the scheme’s interacting with their members (Personal Communications
with GEPF members, Saba Saba Exhibitions, 2013).
For processes and procedures of effecting members’ benefits, registration of
membership to GEPF is automatic. New employees to from Police Force, Prison
Department and other Government departments employing in specific period of time
are registered to the Fund. The Fund also registers voluntary members like member
of parliaments and executive officers heads of different government departments and
thus their registration are mostly conducted by from the marketing department of the
Fund and the Fund officials do the registration by themselves.
When claiming benefits from GEPF, employer cause to be filled a relevant form
which an employee takes to the GEPF office. The employer, however, may assist to
submit the form though follow ups of the claims are usually done by the employee
specifically when claiming for withdrawal benefits.
When applying for loans,
usually the employer assists the beneficiary in almost all stages because at last it is
the employer who makes commitment to the GEPF to be remitting the amount of
money for loan repayment. According to GEPF (GEPF Operations Manager,
Personal Communications, 2012) most of benefit claims are processed within a week
mostly depending on the accuracy of information of the member submitted to them
by the employer and the beneficiary himself. Essential information with regard to
lodging claims at GEPF are displayed at GEPF website.
98
Table 4.34: GEPF Members’ Comments on Effectiveness of Social security
Schemes’ Procedures and Processes
Opinions
Respondents
Percentage (%)
Procedures and processes are good
16
64
Doesn’t understand if procedures and processes 6
24
are good
They are not good at all
3
12
Total Respondents
25
100
Source: Field Data, 2012 - 2013
Members of GEPF support that the processes and procedures of effecting members
benefits are good as 64% of the 25 reached members affirm this, while 24% of those
members claimed to have no understanding that the scheme’s processes and
procedures are good. 24% of those members claim the procedures and processes to
be not good at all (Table no. 4.34). General comments establish that GEPF members
do not have any complaints against the processes and procedures which their scheme
are applying in effecting their benefits. With regard to the use of new
communication technology, GEPF has attempted to be a digital office as most of
internal and external transactions are done electronically. Members of GEPF have
access to their information with regard to their membership in the Fund, for example
members can be aware of the amount of their contributions remitted to the Fund by
their employers.
4.5.5.3 Promotion and protection of members interests
GEPF has mandate, through the provisions of its Act, to deal with employees from
designated government organizations which are Police Force, Prison Department and
99
other Government departments. However recently GEPF has established the
Voluntary Savings Retirement Scheme (VSRS) under which Tanzanians from
different sectors, employed, self employed and political leaders are encouraged to
join. Under this scheme members voluntarily joins the GEPF and after retiring they
are offered with their accrued benefits as other members of the Fund.
Under GEPF every employee is liable to pay 10 percent of his salary as monthly
contribution while every employer is liable to pay 15 percent of the employee's
salary as monthly contribution in respect of that employee. As other Funds GEPF
makes investments of its funds, the GEPF’s investment is guided Investment Policy
to ensure all investments are made in areas with optimum returns. The Fund’s
investments are in different portfolio including government securities, fixed deposit
with commercial banks, corporate bonds, listed shares at the Dar-es-Salaam stock
exchange, loans and real estates.
Table 4.35: Awareness Regarding GEPF’s Investments by Beneficiaries
Investment Awareness Level
Respondents
Percentage (%)
I know there is investment
2
08
Not sure
15
60
I don’t know
8
32
Total Respondents
25
100
Source: Field Data, 2012 - 2013
100
During the year 2010/2011, the Fund Investments increased to TZS. 101 billion
which is 22.83% higher than the previous year where investments were valued at
TZS. 81.6 billion which realised income amounting to TZS 10 billion, an increase of
27.49% when compared to the previous year 2009/2010 income of TZS 7.7 billion
(GEPF Annual Report, 2010/2011).
Views from GEPF members with regard to their scheme’s investment activities
establish the majority of members to be unsure if their scheme invest in their funds.
This is observed by 60% of the 25 reached members responding not to be sure if
their scheme invest in their funds. Those with understanding that their fund invest is
only 8% of the 25 interviewed members establishing a fact that GEPF is not popular
to its members with regard to its investment activities (Table No.35).
Among the four important responsibilities of the Fund is to pay benefit to retirees.
To GEPF it is a critical responsibility that the Fund’s retirees are paid promptly upon
retirement or completion of their employment contracts. During the year 2010/2011
GEPF paid benefit to members’ amounting to TZS 3.6 billion which is 10.58%
higher when compared with previous year 2009/2010 benefits which amounted to
TZS 3.3 billion. The benefit paid included transfers to Public Service Pension Fund
for members’ who graduated to pensionable status (GEPF Annual Report,
2010/2011).
4.5.5.4 Sensitisation Activities
Awareness campaigns are carried out by GEPF to increase public awareness on
GEPF and its activities. Different promotional strategies are employed targeting the
101
general public aimed at specific groups. Radio and television advertisement
programs, participation in exhibitions such as Saba Saba, Nane Nane and Public
Service Week are being used to reach the general public. Besides conducting Annual
General Meeting to its stakeholders GEPF also carries out different seminars with
Police Force, Prison Department and other Government departments and these
seminars lead to new members’ registration (GEPF Annual Report, 2010/211).
4.5.6
Local Authorities Pensions Fund
4.5.6.1 The Legal Framework Governing the Scheme
LAPF began operating in 1944, and ceased doing so between 1972 and 1986, when
it restarted as a result of the Government’s decentralization policy. LAPF was a
provident fund until 2006 when it was converted into a defined-benefit pension
scheme by the Local Authorities Pensions Fund Act No. 9 of 2006 causing it to offer
retirement benefits similar to those of the PSPF. LAPF covers local authority
employees but is in the plan of seeking ways of extending its coverage. Benefits
provided by LAPF are old age, death, gratuity, invalidity and withdrawal for
maternity, marriage, emigration and departure from service. The LAPF’s
responsibilities include collection of contributions from local government employees
and any other institutions or persons who wish to be members. The contributions to
the Fund include 5 or 10 percent of the employee’s wages and 10 or 15 percent of
employee’s wage from the employer side.
According to section 7 of the LAPF Act, the Fund is being managed and
administered by the Board. The Board members include the Chairman, who is the
Permanent Secretary of the Ministry responsible for local government, the
102
Permanent Secretary in the Ministry of Finance and other members as stipulated in
paragraph 1 of the First Schedule of LAPF Act. The functions of the Board includes
to manage and administer the Fund, protect, safeguard and promote the affairs of the
members of the Fund, advise the Minister, appoint other officers of the Fund and any
functions as stated in the LAPF Act.
The LAPF has the Director General also who is responsible in carrying out day to
day the management and operations of the business and affairs of the Fund. The
Director General is the appointee of the President though is being performing his
duties as per directives given to him by the Board. The Director General’s terms of
service are under the discretion of the President and are provided to him within the
appointment instrument referred in section 8 of the LAPF Act.
Table 4.36: Members and Employers Opinion with Regard to LAPF
Constitutionality
Opinion
Employee Members
Response
Understand the
Percentage
Employers
Response
Percentage
9
36
5
63
16
64
3
37
25
100
8
100
constitutionality of their
scheme
Do not understand the issue
of constitutionality of their
scheme
Total Number of
Respondents
Source: Field Data, 2012 - 2013
103
During field survey LAPF members commented on the constitutionality of their
scheme and it was revealed that about 64% of the 25 reached members were
observed to have no understanding of the constitutionality of their scheme (Table
No. 4.36). The observations on the side of employers is different, because 63% of
the reached 8 employers those have registered their employees with LAPF claim to
understand the constitutionality of LAPF (Table No. 4.36). This results reflects a fact
that LAPF employees are not so much concerned with issues of governance on their
schemes when compared to their employers.
4.5.6.2 Operations
LAPF’s core values for accomplishment of LAPF mission are: member focus,
professional
ethics,
integrity,
innovativeness,
transparency,
accountability,
teamwork, excellence, social responsibility and respect for human being.
Implementation of this core value statement is considered into four aspects which the
researcher has been considering into other funds. These operations aspects include
issues of customer care, decentralization, processes and procedures of dealing with
members’ claims and the use of new communication technology.
Regarding customer care, the reception of the LAPF headquarter office in Dodoma is
well furnished and attractive to customers. The reception staffs are kind and well
trained on issues of customer care. Visitors are recorded in the visitors’ book and are
responded to their queries in friendly manner. The receptionist uses a phone to
contact respective officers for a waiting customer.
104
Table 4.37: Opinion of LAPF Beneficiaries with Regard to Customer Care
Opinions
Respondents
Percentage (%)
Warmly welcomed and effectively attended
10
40
Welcomed but left stranded
8
32
Do not have a good reception at all
7
28
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013.
LAPF members also revealed LAPF to have good customer care because of the 25
reached members, 40% claimed to have observed warm welcomes at LAPF offices,
while 32% claimed to be welcomed but were left stranded. Whereas 28% of those
members claimed LAPF to have no good reception at all (Table No. 4.37).
Table 4.38: Opinions with Regard to LAPF Having Decentralised Offices
Opinions
Respondents
Percentage (%)
Prefer having zonal offices
15
60
Prefer centralised office
10
40
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013.
On decentralisation, LAPF as other Funds has decentralised its office to five zones
country wide. Most of members dealings are performed at zonal offices and the
headquarter plays major roles and mostly in complex dealings. LAPF members also
support decentralization of their offices because of the 25 members reached 60%
prefer to have zonal offices while the remaining 40% prefer centralized office (Table
4.38).
105
The processes and procedures of effecting members’ benefits at LAPF is automatic
to employees employed to Tanzanian local government. New employees are
registered to the Fund soon after they are employed because local governments do
have LAPF membership registration forms ready in their offices (LAPF Member,
Personal Communications, 2012). When claiming benefits from LAPF, employers
play major roles because the ways the forms are designed provide the mandatory
authority for employer to certify them before the same are taken to LAPF relevant
office to process the respective benefits.
According to the Controller and Auditor General Report (2010) benefit claims from
LAPF are been processed within a period of one month from the date lodged mostly
depending on the accuracy of information of the member submitted to them by the
employer and the beneficiary himself. Essential information with regard to lodging
claims at LAPF are displayed in the LAPF website.
Table 4.39: LAPF Members’ Comments on Effectiveness of Scheme’s
Procedures and Processes
Opinions
Respondents
Percentage (%)
Procedures and processes are good
6
24
Doesn’t understand if procedures and processes 5
20
are good
They are not good at all
14
56
Total Respondents
25
100
Source: Field Data, 2012 - 2013
106
Field survey reveals that LAPF members do not admire the processes and procedures
in which LAPF is applying in effecting members benefits. This is because 56% of
the 25 reached members claim the procedures are not good at all, while only 24% of
those members claim the procedure to be good (Table 4.39). With regard to the use
of information technology, LAPF is growing rapidly to becoming the digital
organization through the use of new communication technology. According to LAPF
official at Dodoma some 5 years ago, most of LAPF activities were paper work and
thus delayed a lot of transactions relating to members. Currently members are well
facilitated with computerised system under which they are able to view their
membership status and likely can access all forms relating to registration or claims of
benefits (Personal Communications, Dodoma LAPF Official).
4.5.6.3 Promotion and Protection of Members Interests
LAPF is mandated to deal with employees at the local government in Tanzania
Mainland; however, recently the Fund has extended its scope to recruiting members
from different sectoral employees including self employed people students at the
higher learning institutions and political leaders. According to LAPF, members
contributions increased from TZS 11.84 billion in June 2005 to TZS 29.07 billion by
end of June 2008; a growth of 145.59%. Agreements were signed with employers on
settlement of contributions in arrears, a measure that has lead to enhanced
compliance levels (LAPF website, 2012). With regard to contributions employee is
liable to pay 5 percent of his salary as monthly contribution while every employer is
liable to pay 15 percent of the employee's salary as monthly contribution in respect
of that employee.
107
LAPF invests its funds as other funds do. Of the total investment portfolio of LAPF
of TZS 80.1 billion in June 2006, 65 percent was invested in fixed income securities,
28 per cent in real estate and 17 percent in shares. Of the fixed-income portfolio, 84
per cent was invested in government securities, 7 per cent is invested in corporate
bonds and 8 per cent in long-term loans (International Labour Organisation, 2008).
Given the reason that the researcher did not obtain recent data from LAPF current or
latest annual reports the data relied do not show the current status of investments in
LAPF.
Table 4.40: Awareness Regarding LAPF’s Investments by Beneficiaries
Investment Awareness Level
Respondents
Percentage (%)
I know there is investment
5
20
Not sure
12
48
I don’t know
8
32
Total Respondents
25
100
Source: Field Data, 2012 - 2013.
With regard to LAPF’s members knowledge on investment activities, most of the
reached members during the field research indicate to be unsure if LAPF invest on
their funds as witnessed by 48% of the 25 reached members. It is only 20% of those
members claimed to have knowledge that LAPF invest their funds while 32% stated
not to know if LAPF invest on their funds (Table 4.40).
Among the four important responsibilities of the Fund is to pay its beneficiaries. All
in the entire researcher was not capable to obtain recent information of the amount of
money which has been paid as benefits to graduating members. By relying the data
108
of the year 2005/2006 LAPF paid about TZS 6.5 billion as benefits to its members
(International Labour Organisation, 2008).
4.5.6.4 Sensitisation Activities
Recently LAPF inaugurated advertisements in different media for the purpose of
publishing itself to the public.
LAPF has been involved in the production of a
number of brochures which are distributed to different people and participates in
major exhibitions country wide in the International Trade Fair events (Saba Saba),
Nane Nane exhibitions, May Days, Investors Forums and the Civil Servants Weeks
(LAPF Members, Personal Communications, 2012).
4.5.7
National Health Insurance Fund
4.5.7.1
The Legal Framework Governing the Scheme
The NHIF which is established by section 4 of the National Health Insurance Fund
Act, 1999 and began operating in July 2001 and is currently, after the Government,
the main provider of health services in Tanzania Mainland. The NHIF which is
planning new ways of extending membership such as offering coverage to old-age
pensioners, its membership is compulsory for all public-sector employees and
includes their dependants – the spouse and up to four children and/or legal
dependants. NHIF was established to allow the Government to offset some of the
national health costs through: payment of the employees’ contributions, to allow
public-sector employees greater choice in health care and its providers and to
improve the range of health services by fostering the development of private health
providers. NHIF offers a range of benefits, including basic diagnostic. The benefits
109
offered by NHIF involves mostly on health issues which ate tests, drugs, out-patient
services, in-patient services and minor and major surgery.
According to section 29 of the NHIF Act, the NHIF is administered by the National
Health Insurance Board. The Board comprises of the Chairman and other members
as set out in paragraph 2 of Schedule of the NHIF Act. All these members are
appointed by the Minister responsible on health affairs and serve a period of three
years with possibility of re-appointment to a one further term. Among others the
functions of the Board as stipulated under section 30 include to organise the Fund’s
office, appoint personnel, fix their salary and other remuneration as may be deemed
necessary and upon recommendation by the Director General, to supervise the
provision of health benefits and to inspect medical and financial records pertaining
to the Fund health care providers and beneficiaries, etc.
The NHIF has the Director General who is the appointee of the Board. The Director
General acts as the Secretary to the Board and is responsible for the general conduct
of the operations and management functions of the Fund and for other duties
assigned to him by the Board from time to time. The law does not state the tenure
with regard to the position of the Director General which is implied to be under the
discretion of the Board.
Recently, the NHIF was assigned to administer the Community Health Fund Act,
2001. The Community Health Fund (CHF) was established as an alternative to the
fee-for-service schemes. As by 2008, 29 districts of Tanzania Mainland had accessed
to the programme and to the matching grants from the Ministry of Health and Social
110
Welfare. The CHF establishing Act, the Community Health Fund Act, 2001, creates
levels on which the CHF is being managed which includes district, ward and village
levels. The schemes are based on a prepaid amount according to individual or family
contributory capacity instead of the payment of a fee for service. The level of
prepaid contributions is determined by the local government authority (International
Labour Office, 2008).
Table 4.41: Members and Employers Opinion with Regard to NHIF
Constitutionality
Opinion
Understand the
Employee Members
Employers
Response
Percentage
Response
Percentage
6
24
2
25
19
76
6
75
25
100
8
100
constitutionality of their
scheme
Do not understand the
issue of constitutionality
of their scheme
Total Number of
Respondents
Source: Field Data, 2013
Most of NHIF members are not aware on the issue of their scheme’s constitutionality
as field study reveals that 76% of the reached 25 NHIF members do not understand
the issue of constitutionality of their scheme and only 24% of those members claim
to be aware on the constitutionality issue in their scheme. For employers those have
registered their employees with NHIF, 75% of the 8 reached employers are also not
aware on the issue of constitutionality with NHIF (Table No. 4.41). These results
111
establish facts that employees and employers members of NHIF are not so much
attracted in assessing the issues of good governance in their scheme.
4.5.7.2 Operations
NHIF core value statement provides for operations are guided by provision of high
quality services promptly, effectively and courteously. To be a good corporate
organization acting in the best interests of the members and To be responsible
stewards of the funds with which the Fund is entrusted. Furthermore NHIF commits
to promote responsiveness and innovation towards evolving needs of the members
and to be accountable to the stakeholders of the Fund and work through a teamwork
spirit. Operations of this Fund as looked by the researcher are considered from those
core values stipulations by looking specifically to issues of customer care,
decentralization of the Fund’s activities, processes and procedures of dealing with
members’ claims and the use of new communication technology.
With Customer Care issues, NHIF is among the Funds having a lot of active
members possibly health issues in Tanzania are very sensitive and thus it is so
expensive to incur medical expenses without being supported. NHIF offices are
always flooded by its members. When the researcher visited the NHIF headquarter
he found its reception well furnished and attractive to customers and there are
prompt welcomes upon arrivals of the customers. Customers having problems are
provided with an opportunity of expressing their queries in a friendly manner and
assistance is provided to them as soon as possible. The researcher succeeded a meet
an NHIF member who was coming from Muhimbili National Hospital to be assisted
112
with an authority to access some category of medications which were found to be out
of the list of medication agreed upon that hospital and NHIF. The member took
about 15 minutes to have her query settled.
NHIF members revealed NHIF to have good reception to its customers because 64%
of the 25 NHIF members reached in this study commented to have observed warm
welcomes at NHIF office. Its only 12% of those members commented that NHIF has
no good reception at all while 24% of those reached members stated that they were
welcomed but left stranded (Table No. 4.42).
Table 4.42: Opinion of NHIF Beneficiaries with Regard to Customer Care
Opinions
Respondents
Percentage (%)
Warmly welcomed and effectively attended
16
64
Welcomed but left stranded
6
24
Do not have a good reception at all
3
12
Total Number of Respondents
25
100
Source: Field Data, 2013
With regard to the issue of decentralization, including the headquarter, NHIF has
decentralized its office to 19 zones country wide. Most of members dealings are
performed at zonal offices though there are some of issues are executed only at the
headquarter, for example processing of membership cards.
Members of NHIF have positive support on the decentralised NHIF office because
of the 25 members reached in this study 64% revealed to have zonal offices while
those prefer centralized office were only 36% (Table No. 4.43).
113
Table 4.43: Opinions with Regard to NHIF having Decentralised Offices
Opinions
Respondents
Percentage (%)
Prefer having zonal offices
16
64
Prefer centralised office
9
36
Total Number of Respondents
25
100
Source: Field Data, 2012 - 2013
On processes and procedures of effecting members’ benefits, registration of
membership to NHIF is automatic to employees employed to Tanzanian central
government and some of government agencies which are financed by the Treasury.
However NHIF has liberalized the scope of membership to include individuals in
self employment and has been the trustee of most of Community Health Funds
established under the CHF Act.
Beneficiaries of the NHIF are provided with identity cards for identification and
verification to facilitate access health services at accredited facilities anywhere
within Tanzania. Through a number of members interviewed the exercise of
receiving NHIF medical insurance cards takes longer time to be delivered to
applicants and especially members at regions which are far from NHIF headquarter
it takes about four to six months for one to be issued with a card though there are
alternatives of one being issued a temporary identification letter on which a member
may be capable to access NHIF’s medical benefits (NHIF Members, Personal
Communications, 2012).
114
Table 4.44: NHIF Members’ Comments on Effectiveness of Scheme’s
Procedures and Processes
Opinions
Respondents
Percentage (%)
Procedures and processes are good
11
44
Doesn’t understand if procedures and 5
20
processes are good
They are not good at all
9
36
Total Respondents
25
100
Source: Field Data, 2012 - 2013
However field survey indicate that NHIF members generally consider processes and
procedures to be suitable because 44% of the 25 interviewed NHIF members
revealed the procedures and processes to be good while 36% commented them to be
unsatisfactory (Table No. 4.44). There were also those stated not to understand if the
procedures and processes are good counting to 20% of the interviewed 25 NHIF
members as indicated at Table No. 4.44.
With regard to the use of new communication technology, NHIF besides having a
website it is speeding up to become a digital organization. Most of transactions are
done in a computerized manner. NHIF members are facilitated with a portal through
which they are capable to view the NHIF insurance cards applications status. The
website includes also a lot of information which enables members and the public at
large to be aware of how they can access NHIF benefits.
115
4.5.7.3 Promotion and Protection of Members Interest
According to NHIF the membership identity cards come in colors. There are two
membership status colors for the issued cards, which are brown and green which
currently constitute 96%, and 4% of the total identity cards, respectively. Green
cards are issued to senior members of the public service, whereas brown cards are
issued to other categories of employees. Members are allowed to access services at
any accredited health facility within the country regardless of the type of identity
cards they carry. While green card holders have direct access to specialized hospitals
without following the referral system, the brown card holders need referral letters to
access services at specialized hospitals, when need arises. Notwithstanding the
difference in identity cards’ colour, the service package is the same for both (NHIF
website, 2012).
The NHIF’s benefits package consists of ten benefits which are: Registration and
Consultation Fees, Outpatient Services, Medicines, Diagnostic Tests, Inpatient
Services, Surgical Services, Physiotherapy, Optical Services, Orthopaedics and
Dental Services. The providers issue medicines based on the National Essential
Medicines List and an additional list drawn by NHIF in regard to the regulation of
using Generic formulations, adherence to the mutually agreed NHIF Medicines Price
Schedule with respective medical providers. The price schedule is prepared after
taking into account macroeconomic changes such as prices, inflations, and any other
relevant economical indicators (NHIF website, 2012).
On the part of CHF, this is a voluntary scheme under NHIF as a pre-payment
council’s based scheme aimed at facilitating the community to access health care at
116
an affordable premium that is determined by the community itself. Available data
indicates that NHIF beneficiaries have been increasing gradually from 1,971,251 as
of 30th June 2010 to 5,867,140 in the year 2011 (the increased amount includes
3,368,220 beneficiaries of CHF) with benefits paid in the year 2011amounting to
TZS 44.3 billion (NHIF Facts Sheet, 2001/2002 - 2010/2011) .
NHIF’s other sources of income includes investments in short-term securities in
accordance with section 33(d) of the NHIF Act. Through NHIF Annual Report of
2010 income from investments is the second largest source of income after
contributions. Investments income increased by 4.2% from TZS 16.3 billion in 200809 to TZS 17.1 billion in 2009-10. The Fund is required by the law to invest in short
term investments such as treasury bills and fixed deposits. The NHIF investment
policy follows four investment principles which govern investment of Health
Insurance Funds, these are: Safety, Yield, Liquidity and Economic and Social Utility
(NHIF Actuarial and Statistical Bulletin, 2010).
Table 4.45: Awareness with Regard to NHIF’s Investments by Beneficiaries
Investment Awareness Level
Respondents
Percentage (%)
I know there is investment
8
32
Not sure
14
56
I don’t know
3
12
Total Respondents
25
100
Source: Field Data, 2012 - 2013
The majority of NHIF members are not aware that there investment activities within
the Fund as witnessed by 56% of the 25 interviewed members whom stated to be
unsure if the Fund invest their funds while 32% affirm that there are investment
117
activities and 12% of those members do not know if there are investment activities
by the Fund (Table No. 4.45).
4.5.7.4 Sensitisation Activities
As at 30th June 2010, NHIF had conducted advocacies to 243,251 stakeholders
which is a 13% increase, compared to 215,830 stakeholders in 2008-09. The
awareness and education campaign programs proved to be useful not only to
members, but also to other stakeholders as indicated by the decline in complaints
from the beneficiaries of the Fund. During the financial year 2009/10 the NHIF
embarked on a Ward to Ward awareness creation campaign mainly in rural areas
where the majority of the members reside and work. As of 30th June 2010, NHIF
had managed to train 243,251 members of whom 69% were from the education
sector and 31% from other sectors (NHIF Actuarial and Statistical Bulletin, 2010).
NHIF has a number of programs which are being aired in public media for example
there are a number of television short breaks advertisements in different channels
countrywide. There are also brochures carrying NHIF information and NHIF
participates in a number of exhibitions, all these intended to disseminate information
not only to NHIF members but to the public also.
4.6
Discussion of Findings
4.6.1 The Best Legal Framework for Governing Social Security Schemes in
Tanzania
The first research question in this work was to examine on legal framework
governing social security schemes in Tanzania. Findings on this research question
118
reveal that there are no any clear standards which have been put at place as a
guidance providing as to how the social security schemes should be governed in
Tanzania. Through statutory provisions, the constitutionality of top officials of the
majority of schemes is not very clear on the issues of their appointments, tenure and
overlapping functions. Some of these officials are put at their positions in the manner
they can abuse their power simply or they can themselves be removed easily.
Some of schemes do not have acceptable number of benefits to conform with the
ILO’s standards and hence make such schemes to be lagging behind the new
international trend of social security schemes. For example, the GEPF is still
operating under the colonial law. It is not known as to how the Chief Executive
Officer of GEPF is found. The GEPF also has only two benefits which are the
withdrawal and survivors benefits.
Likely, almost all of the schemes do not have a mechanism which allows flexibility
that enables aggrieved members to charge them before the court of law, SSRA or
elsewhere. The provisions of law of those schemes have excluded these schemes
from proceedings’ liability and imposed the same to defaulting employers or even an
employee. Likely, with exclusion of NSSF and NHIF, all other schemes laws do not
state the mechanisms on which their aggrieved members can also appeal. However,
recently, after the establishment of the SSRA, all members of the schemes may
appeal to the SSRA.
4.6.2 The operation of the six schemes in Tanzania Mainland
The study also looked on the operations of the six schemes in Tanzania Mainland on
119
the issues of customer care, decentralization of activities, procedures of dealing with
members claims and the use of new information and communication technology by
the six schemes.
The study reveals that most of these social security schemes have improved issue of
customer care because there are no serious complains on the manner visitors are
attended when they arrive at those respective offices rather than delays of executing
what has been agreed when a customer was in the respective scheme’s office. This
finding indicates that the schemes are very competitive on the aspect of customer
care and save for NSSF there were some complains of how customers are welcome
other schemes seem to be attracting people and there is high possibility that the
scheme which has put priority on handling customers warmly may attract more new
members.
The study has also revealed that almost all social security schemes are decentralising
their offices up-country to simply the processes of dealing with members situated
up-country. Though there are complains that up-country offices are not efficient and
mostly depend on headquarters’ directives thus minimise their scope in the face to
face dealings with customers, this is however predicted to cease in future because
there are few years since these schemes have started establishing their up-country
offices and its expected in future up-country offices will have absolute autonomy.
Likely the study reveals that some of schemes have simplified the processes and
procedures of dealing with members, though there are other schemes which still have
procedures which unnecessarily delay the processes. For example, NSSF members
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complained six months of waiting out of employment so that one can lodge claims
before the NSSF was grossly unfair. The procedures and processes however may be
simplified through the adoption of advanced and new technologies. Schemes have to
be fast in dealing with members’ queries and keep members’ records intact at all the
times.
Lastly, there is a growing approach for all the social security schemes to be using
new information and communication technology. This has helped in a number of
activities ranging from providing portals in the website to enable them access their
information of membership to their respective scheme. This, as it has been started
above will be helpful to each competitive scheme because, adoption of new
technology like ICT will enable the schemes to have direct link with their members
wherever they will become unemployed.
4.6.3 Schemes’ Promotion and Protection of Members’ Interests
Each scheme has objectives of promoting and protecting its members’ interests. The
researcher found that schemes may be competitive when they put at place the most
preferred benefits. In this study good retirement pensions benefits and withdrawals
benefits seem to be the most preferred benefits, though currently there are
discussions of abolishing the withdrawal benefit. The retirements benefit being
preferred mostly is through PSPF because, members retiring from this scheme
receive satisfactory payments compared to other schemes. The withdrawal benefits
which is provided by schemes like NSSF, GEPF and PPF, have been preferred
because they do help members to curb difficult situations whenever they become
unemployed.
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Recently, through statutory provisions, the withdrawal benefit was abolished by the
amendment made in the SSRAA. There was a public outcry which forced the same
to be restored and members are still enjoying this benefit. Paying this benefits has
however been stated by SSRA to be weakening the sustainability of social security
schemes.
4.6.4 Sensitisation Activities by Social Security Schemes
The researcher also considered the activities of sensitisation by social security
schemes and revealed that almost all schemes are running sensitisation programs.
Social security schemes have competing ins sensitatisation activities and thus has
made them competitive to each other. There are a lot of sensitisation activities being
conducted by all schemes. However, the means of sensitisation mostly known are
through television advertisements whereby the rural areas are not much exposed to.
For this reason the sensitisation activities seem to be capturing a particular group of
people and thus leave social security sector coverage minimal because the means of
inspiring members from informal sector are not known into most of these schemes.
There is needed however a means of widening sensitisation activities to reach the
urban areas where there a lot of people in informal sectors. Informal sector people
may help a lot in extending the scope of social protection if they are caused to be
members of social security schemes.
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CHAPTER FIVE
5.0 CONCLUSION AND RECOMMENDATIONS
5.1 Summary of Findings
This part presents the core part of this study, the competitiveness of the social
security schemes, through analysing the findings. Generally, this study reveals that,
though somewhat, it is difficult to compare the competitiveness of social security
schemes in Tanzania Mainland but still these schemes can be competitive to each
other by looking on these Funds’ legal frameworks governing them, their operations
aspects, the way they protect and promote members’ interest and their sensitisation
activities. The researcher arrived to that conclusion because of reasons stated in each
considered research question as follows:
5.1.1
What is the Best Legal Framework Established For Governing Social
Security Schemes in Tanzania?
With regard to this, there are no any clear standards which have been put at place as
a guidance providing as to how the social security schemes should be governed in
Tanzania. Through statutory provisions, the constitutionality of top officials of the
majority of schemes is not very clear on the issues of their appointments, tenure and
overlapping functions. Some of these officials are put at their positions in the manner
they can abuse their power simply or they can themselves be removed easily.
Some of schemes do not have acceptable number of benefits to conform with the
ILO’s standards and hence make such schemes to be lagging behind the new
international trend of social security schemes. Infact the schemes are being
administered through colonial laws.
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Likely, almost all of the schemes do not have a mechanism which allows flexibility
that enables aggrieved members to charge them before the court of law, SSRA or
elsewhere. The provisions of law of those schemes have excluded these schemes
from proceedings’ liability and imposed the same to defaulting employers or even an
employee.
5.1.2
How do the Six Social Security Schemes Operate in Tanzania
Mainland?
Looking on how the six social security schemes operate in Tanzania Mainland the
study looked on the issues of customer care, decentralization of activities, procedures
of dealing with members claims and the use of new information and communication
technology by the six schemes. The study reveals that most of these social security
schemes have improved issue of customer care because there are no serious
complains on the manner visitors are attended when they arrive at those respective
offices rather than delays of executing what has been agreed when a customer was in
the respective scheme’s office.
The study has also finding that almost all social security schemes are decentralising
their offices up-country to simply the processes of dealing with members situated
up-country. Though there are complains that up-country offices are not efficient and
mostly depend on headquarters’ directives thus minimise their scope in the face to
face dealings with customers.
Likely the study reveals that some of schemes have simplified the processes and
procedures of dealing with members, though there are other schemes which still have
124
procedures which unnecessarily delay the processes. For example, NSSF members
complained six months of waiting out of employment so that one can lodge claims
before the NSSF was grossly unfair.
Lastly, there is a growing approach for all the social security schemes to be using
new information and communication technology. This has helped in a number of
activities ranging from providing portals in the website to enable them access their
information of membership to their respective scheme.
5.1.3 How do These Schemes Promote and Protect the Interests of Their
Members
The researcher looked also on how these schemes promote and protect the interest of
members and come with an analysis that social security schemes may be competitive
when they put at place the most preferred benefits. In this study good retirement
pensions benefits and withdrawals benefits seem to be the most preferred benefits,
though currently there are discussions of abolishing the withdrawal benefit.
5.1.4 What are Social Security Schemes Doing to Sensitise their Beneficiaries
on the Functions of Social Security in Tanzania
Almost all schemes are running sensitisation programs. At this aspect the social
security schemes have been doing well and thus has made them competitive to each
other. There are a lot of sensitisation activities being conducted by all schemes.
However, the means of sensitisation mostly known are through television
advertisements whereby the rural areas are not much exposed to. For this reason the
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sensitisation activities seem to be capturing a particular group of people and thus
leave social security sector coverage minimal because the means of inspiring
members from informal sector are not known into most of these schemes.
5.2 Implications of the Results
Research findings implies that there is minimal direct competition between the social
security schemes because of the variations of the aspects on which these social
schemes are competing. Taking only one aspect of retirement benefit as an example,
the retirement pension benefits which are being provided by all schemes except
GEPF and NHIF do compete at the amount being provided because of the formulas
which each scheme has adopted. While PSPF and LAPF have similar formulas in
calculating the retirement pensions, other schemes have different formulas resulting
to members being paid very low amount of retirement pensions.
5.3 Conclusion
The study has revealed that even if it is difficult to compare the competitiveness of
social security schemes in Tanzania Mainland but still these schemes can be
competitive to each other by looking on these Funds’ legal frameworks governing
them, their operations aspects, the way they protect and promote members’ interest
and their sensitisation activities. The examination of those matters have exposed
there are variations of competitiveness of the social security schemes thus one
scheme might be good at one aspect and the other at another aspect thus making
these schemes dominant at their relevant coverage regardless the attempts of
liberalizing social security activities bestowed in the SSRAA. The newly established
126
regulator of the social security schemes in Tanzania has been imposed with hope that
the Tanzania social security field is going to be liberalized in its totality soon and
thus leading to clear chances of competition among the schemes to the advantage of
all the stakeholders.
The study has also revealed that some of social security schemes have some defects
on their legal framework which is unknowingly affecting their governance. The
provisions of laws of some schemes are not clear on the issues of appointments of
their top managers, the laws have no appeal mechanisms when members are
aggrieved by those schemes conducts against them and there are schemes which
have limited package of benefits. With regard to schemes’ operations, the study has
shown that most of schemes have enhanced issues of customer care and have
decentralised their offices. The schemes, though complained by members, are also
trying to have satisfactory good procedures and processes of effecting members
claims through adopting new technology, which is the use of information
technology.
With regard to the issues of promotions and protection of members interests of their
members these schemes have divergent of benefits which seems to be creating a
locked monopolistic situation because the benefits which may be obtained from one
scheme can not be necessarily obtained from the other scheme. Furthermore, for the
benefits which are similar into a number of benefits they are treated differently thus
making the schemes to be uncompetitive to each other. This is witnesses by the
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different amount of retirement pensions (lump sum and monthly) paid by a number
of schemes to their retiring members.
Lastly, the study also considered the activities of public insemination being
conducted by these social security and the conclusion revealed is which shows that
most of these schemes are conducting public insemination activities. The schemes
are using different media, e.g. televisions, magazines, radio and brochures to
communicate their activities to the public. Most of schemes are also participating
into different exhibitions and social responsibility events to publicise their activities.
5.4
Recommendations
The following recommendations are made on the basis of the study:
(i)
Though the government has played its role in establishing the SSRA, still
there is a need of ensuring that the SSRA should be performing consistently
for what is possible to make the social security schemes competitive either by
encouraging the formation of more schemes or whatever manner which
makes the schemes to extend their coverage.
(ii)
Social security schemes also should consider changing their attitudes and
become competitive in the aspects of operations, benefits provisions and all
aspects of the services they provide because in the future, with liberalized
social security activities, people will prefer joining the scheme suiting their
desires.
(iii)
Employers should let employees opt to join schemes which suit their desires
and should not be restricted. Employees also have the role to know their
rights and entitlements with regard to social security protection and that they
128
should demonstrate such knowledge to ensure compliance by their
employers and social security schemes.
(iv)
Social security schemes have to be transparent to their members with regard
to investment issues. Members of social security schemes seem to prefer
schemes those are transparent on investment projects.
5.5 Limitation of the Study
There were no grave limitations that hindered this study. However in the course of
collecting data one pertinent incidence emerged which attempted to divert some of
the respondents from answering the intended interview questions. As a matter of fact
last year 2012 the Tanzanian Parliament passed an Act of Parliament, the Social
Security Laws (Amendments) Act, 2012, which among others repealed the Social
Security Funds laws, specifically the provisions which enshrined the withdrawal
benefits into those respective schemes.
As a matter of implementing such amendment the SSRA on June 2012 issued a
public announcement that by July 2012 all schemes which were providing
withdrawal benefits to their members stop doing so. The announcement became
unfriendly to most of beneficiaries and in the course of interviews with most of
employees members of the schemes the researcher was forced to discuss this issue in
a prolonged time and the issue infact did not only dominate the interview sessions
but also captured a serious attention to the extent of attempting to divert the study’s
objectives.
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The other limitation was gradual responds to the questionnaire supplied to some of
social security schemes’ officials. This necessitated the researcher to utilise the Saba
Saba Exhibitions of the year 2013 in Dar-es-Salaam, Kurasini area whereby
schemes’ officials at the Exhibition pavilion were capable to provide information
requested.
5.6
Areas for Further Research
In the course of this study, the researcher found there is a need of have more studies
in the area of social security. Few studies which may also establish the social
security schemes competitiveness include the performance of social security
schemes in Tanzania Mainland before and after the establishment of the SSRA. In
this research, one may consider on aspects of the schemes’ past and current coverage
and their investment activities.
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REFERENCES
Barya, J.J (2009). Interrogating the Right to Social Security and Social Protection in
Uganda, HURIPEC Working Paper No. 23, Makerere University, Kampala,
Uganda.
Barya, J.J (2011). Social Security and Social Protection in the East African
Community, Fountain Publishers, Kampala.
Brand M. (2007). Social Security Systems in Transition, A Comparison of Germany
and Poland, Jagiellonian University, Poland.
Centre for Governance and Development (2005). NSSF Bills Digest, Kenya.
Cronbach L J (1951). Coefficient Alpha and The Internal Structure of Tests.
Psychometrika 16:297-334.
Dau R. (2006): The Adequacy of Current Social Security Benefits, A paper
presented to the Meeting of Directors of Social Security Organisations in
English Speaking Africa, Mahe, Seychelles.
European Union (2011). Your Social Security Rights in the United Kingdom,
European Commission, United Kingdom.
Gaya, C. (2011). Challenges Facing Public Pension Systems in Tanzania,
HakiPensheni Company Limited, Dar-es-Salaam.
International Labour Organisation (2010). Extending Social Security to All, A Guide
Through Challenges and Options, Geneva.
International Labour Office (2002).
Tanzania Mainland, Social Protection
Expenditure and Performance Review and Budget, Geneva. (Also can be
accessed at website: www.ilo.org/publns).
131
Kenya Ministry of State Planning (2012), Kenya Social Protection Sector Review,
Nairobi, Kenya.
Kothari C.R. (2008). Research Methodology, Methods and Techniques (Second
Revised Edition), Delhi, India.
Liu, L. (2001), Foreign Social Security Developments Prior to the Social Security
Act, USA Social Security Administration , Baltimore, MD 21235, USA.
Mchomvu A.S. T, Tungaraza F.S.K. and Maghimbi S. (2002). Social Security
Systems in Tanzania, Journal of Social Development in Africa, Volume 17,
No. 2, pp 11-28.
Ministry of Labour, Youth Development and Sports (2003). National Social Security
Policy, Dar-es-Salaam.
National Audit Report (2010). A Performance Audit on the Processing of Terminal
Benefits of Retirees from the Central and Local Government of Tanzania, A
Case Study of PSPF and LAPF, Dar-es-Salaam, Tanzania.
Paine,
T.
(1795).
Treatise
on
Agrarian
Justice,
(accessed
at
www.ssa.gov/history/paine.html).
Velloso, H. (2006). Social Security in the United States: Overview and Outlook,
New York, N.Y. 10017, U.S.A.
Wangwe S. (2005): Culture, Identity and Social Integration: The Tanzania
Experience in Social Integration, a paper presented at a conference “New
Frontiers of Social Policy”, Arusha, 12-15 December, 2005.
132
APPENDICES
Appendix I: Interview Questions Directed to Selected Members of Social
Security Schemes
A.
Preliminary Questions
1. What is your name?
2. For how long have you been in employment?
3. What is the name of the company which has employed you?
4. Are you a member of any social security scheme
B.
The legal framework established for governing social security schemes in
Tanzania
5. Do you know how are the managers of your social security obtained?
6. Who appoints them and what is their constitutionality?
7. Do you know all the benefits which are provided by your social security schemes?
Can you mention them?
8. Which benefits do you prefer the most?
9. If you are aggrieved by your social security scheme actions against you do you
know where to appeal?
C.
The Operations of Social Security Schemes
10. How were you welcomed when you visited your social security scheme?
11. Do you prefer your social security scheme to has an up-country office? Why?
12. Do you understand the processes and procedures of instituting claims from your
social security scheme? Are the procedures good?
133
13. Does your social security scheme communicate or serves you through modern
communications devices like internet?
D. Promotion and Protection of the Interests of Members
14. What benefits would you prefer that your social security scheme would provide
you which you are currently not having in your scheme?
15. Does your social security scheme invest in your contributions? If the answer is
yes may you mention any of the projects or programme which your scheme has
invested for?
E.
Sensitisation Activities by Social Security Schemes
16.
Have you been trained anything about your social security rights by people
from your social security scheme or your employer? (If the answer is yes)
What are your rights in the scheme?
17.
Have you seen your social security scheme publicizing their activities for the
public to know it?
F.
Conclusion
18.
Do you have anything to say to advise your social security scheme to be
competitive with other social security schemes?
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Appendix ii: Questionnaires
Introduction
This questionnaire is intended to gather some information with regard to the
activities of social security schemes in Tanzania Mainland. The information is to be
used in writing an academic dissertation to be submitted to the Open University of
Tanzania for Masters Degree’s qualification. The researcher requests your good
office to provide the information requested by filling this questionnaire.
A. Managers of Social Security Schemes
1. Particulars
i. Name of the Scheme: (e.g. NSSF, PSPF, PPF, etc):
__________________________________________________________
ii. Name of the person responding to the questionnaire:
___________________________________________________________
iii. Position:
_____________________________________________________
2. Legal Framework
iv. May you provide for the legal framework governing the scheme? E.g.
issues of appointments of executive officials, board, functions of the
scheme, powers provided under the Act,
etc.____________________________________________________
v. Do you have any legal challenges hindering you to implement your
functions properly (Yes/No): If the answer ticked is yes please state
135
them)
___________________________________________________________
3. Operations
vi.
What complains have been initiated by your members the most?
___________________________________________________________
May you provide any plans which your scheme has started or is about to
start in solving the problems complained by its members (if any as per
number
xiii
above)
___________________________________________________________
___________________________________________________________
___________________________________________________________
With regard to processes and procedures, how long does it take the
scheme to conclude members claims, e.g. claims with regard to
retirement
benefits,
funeral
grant,
survivor
benefits,
gratuity,
etc.________________________________________________________
___________________________________________________________
___________________________________________________________
vii. Do you have any other plans relevant for improving your scheme’s
competitiveness?
___________________________________________________________
___________________________________________________________
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4. Promotion and protection of members’ interests including membership,
coverage and benefits
i.
Can you mention the categories of members in your Scheme?
___________________________________________________________
___________________________________________________________
ii.
What kinds of people are covered in your social security scheme
in terms of entitlements/ benefits?
___________________________________________________________
___________________________________________________________
iii.
Which benefits offered are more competitive and attractive to
your members? (List them by a ranking, if possible provide the
ranking percentage)
___________________________________________________________
___________________________________________________________
iv.
Which products/benefits offered by your scheme are more
competitive to your scheme when compared to other social
security schemes?
___________________________________________________________
___________________________________________________________
What is the current number of members within your scheme?
___________________________________________________________
(v)
May you provide the number of members enrolled in your scheme from
the year 2006 todate? __________________________________
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(vi)
May you provide the number of beneficiaries of the benefits provided by
your
scheme
from
the
year
2006
todate?
________________________________
B.
Employers
i.
How many employees do you have?_____________________
ii.
How many among them are enrolled in the Social Security
Schemes?_______________
iii.
Which
Social
Security
Scheme
has
enrolled
your
employees?__________________________________________
iv.
Before your employees are enrolled to the Social Security Scheme, do
you educate them about social security and the importance of social
security schemes?(Yes/No), If the answer is
No, please provide the
reasons_____________________________________________________
_____________________________________________________
(vii)
Are you the one who proposes the Social Security Scheme to be joined by
your employees?(Yes/No) If the answer is No, please provide the
reasons_____________________________________________________
_____________________________________________________
(viii) Have you ever been warned by any Social Security Scheme for any
misconduct regarding social security protection, like failure to register
your employees or failure to deliver employees contribution at the right
time? (If, yes do you have any cases on this?)
________________________________________________________
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c)
Social Security Regulatory Authority (SSRA)
i. What is currently the SSRA doing in relation to the Social Security
Schemes? _________________________________________________
________________________________________________________
ii. What are the main constraints which the SSRA has identified to be the
hindrance of Social Security Schemes’ effective operations
__________________________________________________________
iii. What is the SSRA doing or shall do as a means of safeguarding the
interests of members of the Social Security Schemes, employers and
Social Security Schemes against each other?