President Jakaya Kikwete on Friday allayed public fears that pension funds were cash strapped, noting that they were doing far better than ever.
President Jakaya Kikwete
Speaking at the climax of the Pension Funds week on Friday, the president pledged that the government would pay all money it owes pension funds so that they are able to do their work effectively including paying the retired elderly.
His assurance comes in the wake of reports that the Public Service Pension Fund (PSPF) was cash strapped and that the government owes the Fund some 6trln/-. Mr Kikwete said the debt existed but that it did not mean that the fund was bankrupt.
He said the government was aware of the debt and would start paying it off with 50bn/- in the coming 2013/2014 budget. He said the government was also ready to support the funds financially in case they face challenges in paying pension to the retirees.
“Its not true that PSPF is in a bad state financially or bankrupt, to the extent of being unable to run its operations, but that the Fund demands is owed 6trln/- by the government, which will be paid,” he said.
He further said that the government would pay the debt of10bn/- which LAPF demands from the government, so that it makes up to the workers,” he said. The issue of the elderly being paid pension was touched by the president on Friday, asking Pension funds to pay them but to first move with caution.
“I direct you Minister Gaundencia Kabaka to start working on paying pension for the elderly, but you should do that cautiously and you have to convince yourselves beyond doubt before starting the exercise, because it would be a shame if it is wrongly done,” he said.
Adding: “I ask you not to promise the public what you can not deliver in a sustainable manner. Please tell the elderly the truth.” The President asked the experts to learn from other countries that have succeeded in this area, because the elderly have never contributed to the pensions and therefore paying them in their numbers of 2million is a big task.
On the other hand, he directed directors of all pension funds to meet and discuss how to improve benefits and harmonise them, so that those who change from one Fund to another do not face problems in future when following up their payments.
He noted that for an assessment that was recently done on the pension funds, they are all in good condition compared to the previous years. He said they had increased their revenues from 3trln/- to 4.24trln/- including reaching 1.7 million members.
By ORTON KIISHWEKO, Tanzania Daily News
