Retirement age, also known as the golden years, is a part of life that the majority of working people look forward to. A time when you can wake up when you want, do what you are passionate about, and create the lifestyle you’ve dreamed of.
Making this dream into a reality, however, requires a lot of dedication, hard work, and consistency in saving up during working years. Denying yourself some luxury in the present moment to enjoy benefits later on in life is what the majority of people work towards. However, saving for retirement is also about ensuring you have a steady stream of income that can keep you going and maintain your lifestyle, and save you from having to depend on your relatives for financial assistance.
Related Article: Zambians Call for Retirement Age Reduction for Youth Employment
In Tanzania, retired employees are not having the best post-retirement life, with some of them even giving up on their dreams to start businesses. They claim that the pre-retirement training that they are given is selling them golden dreams without taking into account the harsh reality that awaits them; Lack of pension funds.
The main objective of a retirement pension is to guarantee income security to the elderly members of society through periodic payments. These payments are provided to an insured person who meets the eligibility criteria:
- Have attained pensionable age
- Have made not less than 180 monthly contributions
- Have attained the age of 55 or above but before attaining pensionable age
However, in Tanzania, those who meet these criteria are finding themselves poorer due to overdue delays in the payment of pension benefits. Experts have warned that further delays in these payments could result in a rise in mental disorders among this demographic.
The Post-Retirement Problem
In 2014, the government merged four pension funds – LAPF, PSPF, GEPF, PPF- into the Public Service Pension Fund to specifically serve public employees. The National Social Security Fund (NSSF) remained the fund reserved to serve private workers.
This was followed by a new pension regulations system which provided that workers should receive 25% in lump sum payment and the remaining 75% issues monthly over 13 years. This change resulted in an outcry as public servants were used to receiving 50% in a lump sum and 50% on a regular monthly basis spread over 12 years.
The reaction from the public caused the former President, the late John Magufuli to suspend the use of the new system and direct all pension funds to use the old system for 5 years – enough time for funds and workers to come up with a new agreeable system.
Post-Retirement at Present
Recently Parliament has issued dissatisfaction with the government’s delay in providing planned bills on the formula for calculating workers’ pension benefits. They were expecting the bills to be tabled to provide ample time for debate ahead of the 2022/2023 financial year.
Retired Employees
For many retired employees, the dreams of starting businesses post-retirement are beginning to fade due to failure to receive their pension benefits. Pension funds are pinning the delay on several issues such as a rise in demand after the merger of several funds, challenges due to inaccuracies in filling forms, and employers’ failure to submit contributions on time.
Advice
Currently, retired employees have provided advice to those currently working as well as to pension funds to ensure this issue does not persist.
- Workers are encouraged to regularly check their pension accounts to ensure that there are no challenges and if there are, these can be resolved promptly
- Pension funds have been encouraged to have a system in place to deal with employers who fail to submit pension contributions.
