The announcement in parliament, by the Minister for Finance, on the new arrangements for servicing retired civil servants’ pensions, was very welcome news. When delivering the Budget speech for the year 2007 – 2008, last June, the Minister announced that in the course of the next financial year, (2007 – 2008) “……all pensioners currently serviced by the Ministry of Finance will be transferred to the various Funds…. This step will eliminate the nuisance and suffering that pensioners have experienced over time.”
The Government has to be congratulated very much for this decision. Why no one thought of this before?
The next question is whether or not the transition will be smooth. We have witnessed the procedural chaos that accompanied the exercise to re-enter into the pension registry those who had opted out before.
There has been that very entangled exercise to pay off those who were employees of the then East African Community. There are other examples. The point is clear here that preparation for the intended transfer will have to be thorough and methodical. This is possible.
Twelve months in which to do this work is a long enough time, not withstanding Lord Parkinson’s law. Secondly, numbers involved are certainly manageable. One is not talking of millions of pensioners.
It is intriguing, though, that the pensioners are being “transferred to the various Pension Funds including the National Social Security Fund (NSSF), Public Service Pension Fund (PSPF), Parastatal Pensions Fund (PPF), and Government employees Provident Fund (GEPF)”. Why is that? What are the criteria? Who will direct the traffic and how? In the eyes of the layman, the next logical venue is simply the Public Service Pensions Fund. These funds are, after all, employer-based, employers specific.
In making the announcement, the Minister was very correct in inferring that the present order is a source of great inconvenience. Indeed, it is. It is a great nuisance from the very start, when the retiree, after years of work, twenty or more, is asked to produce the letter of confirmation, issued all that way back.
Then there are all types of inconvenience to the day the pension cheque is received. Narrating all these will require much more time and space than are available here. Let us only hopefully assume that an improvement from all this change will be axiomatic. Two problem should, however, be mentioned.
One problem has been about regularity. The other one is about the amount. Both are critical: however, there are a number of things about the latter that ought to be mentioned specifically. At the Cabinet meeting, in the 1970s, it was decided that no monthly pension rate should be below the monthly minimum wage rate of the day. This is for a very good reason. Minimum wage rates are to do with the cost of living, and in developed societies, adjustments are done automatically, in keeping with the cost of living index of the day.
The Cabinet decision of the 1970s was done in that spirit. It was, however, never implemented. Under the proposed new rrangements it should. It can.
The minimum wage issue is a subject apart, and should be treated as such elsewhere. However, it is related to the pensions issue, in that it is illogical for any monthly pension rate to be below it.
The second issue is about amounts paid per month to the people of the same rank who did however retire during different times, or periods. Because of their ranks, or status in society, or in the service, they maintained, or were required to maintain certain levels or standards of living. In retirement the ‘late’ retirees have been taken care of, in this respect, whereas, the earlier retireeshave been neglected. This situation needs to be adjusted.
One must also remember that the retirees who were in leadership appointments in the earlier phases of Government worked under conditions which simply cannot be compared to those of today, in terms of perks, and more. Today’s leaders may even engage in business, and directorships. During retirement, they may even be given a house, or a car.
Those two groups of people live side by side today. It is an awkward situation, which their past employer should see to be something for adjustment. Is it out of place to say it again here that these people do not number in their thousands after all? Or that, all it required is for the government to decide on that, as it has on a number of occasions? When medical students went on strike, Government funds become available, somehow. Now, funds for loans to students are available.
This issue should be decided now, as a part of the process to transfer the pensioners from the Treasury to those Funds. Someone made a joke, someday, that the Government as an employer is so rich that it can even pay salaries of ‘ghost workers!’
This is on the light side. The more serious one is that the up-and- coming generation, seeing the poor plight of pensioners, have actually been forced to think hard of what they should do now, as a hedge against that awful time ahead.
Hon. Hawa Ghasia, Minister for Public Service Management, is remembered for her awful answer in Parliament, the other day, on the question of raising pension rates. She said we should wait for the economy to improve. Implicitly, salary increases should also wait for the same.
One rejoinder has been made, to this effect that the economy (GDP) has in fact grown steadily, from 4% to 7% in about the last decade. Better figures are available to the Minister’s next door, at the Planning Ministry. But advisers to the Minister must also look back to the times when increases of salaries, including minimum wages were a May Day climax, regular and expected. Advisers will see that this was possible for a reason other than the state of the economy.
May the Minister be on hand not only to make sure that the new pension arrangement announced by her colleague, the Minister for Finance, is installed smoothly, and free of halts, reversals, or revisions, along the way, and is also actually a source of improved levels of pension. The issue of waiting for the economy to grow, for that to happen, while generally correct, is only remotely related to this case.
Under the new arrangements, the plight of pensioners will obviously be in abler hands, starting with being able to know in advance, exactly who is retiring when, and having all the documents available and up to date.
The funds should also have their own way of getting to know levels of the cost of living, although the Bureau of Statistics and sections of the press are also on hand.
Allied to this issue of the welfare of retirees are trade unions, like TUCTA, or ‘post-dated’ ones like PUT in Tanzania, or the American Association of retired Workers in the USA. The Government Social Welfare Department) should also be speeding up IMPLEMENTATION of the Policy on Aging. Brainstorming work on this policy was done in Morogoro and Dar es Salaam, more than 15 years ago, if my memory serves me right. |