Tanzania Pension Bill signed into law
Tanzania’s government has signed into law the Public Service Social Security Act, 2018, hereinafter referred to as the PSSS Act, which joins all pension funds into two major entities.
The immediate implication is that the entire labour force in both the public and private sectors will be served by the Public Service Social Security Fund (PSSSF) and the National Social Security Fund (NSSF).
What does this mean to business owners in Tanzania? Currently there are five social security funds in the country: the National Social Security Fund (NSSF), PPF Pension Fund, Public Service Pension Fund (PSPF), Local Authorities Pension Fund (LAPF) and Government Employees Provident Fund (GEPF).
Because of the new PSSS Act, the Public Service Retirement Benefit Act Cap 371, the LAPF Pensions Fund Act Cap 407, the GEPF Retirement Benefits Fund Act Cap 51 and the PPF Pensions Fund Act Cap 372 will be repealed.
It is important for employers to know that a member who changes employment from the public sector to employment in the private sector’s membership will be transferred to the National Social Security Fund, and all employees in the public sector who are members of the National Social Security Fund will be transferred to the PSSS Fund.
The new Act has also introduced two new benefits which were not granted earlier by the Pension Funds. These are Survivor Benefits and Unemployment benefits.
Survivors benefits would be paid to the Dependents of the deceased (widow, children or parents of the deceased).
The Act also specified retirement age as 60 years for compulsory retirement and 55 years for voluntary retirement.
Tanzania is gaining impetus as a progressive market that is slowly but surely working towards becoming a knowledge-based economy.
Skills and labour are at the heart of this growth trajectory.