YOUR JOBS ARE SAFE, SAYS PRESIDENT JOHN MAGUFULI

Dodoma. President John Magufuli yesterday assured social security sub-sector employees that their jobs were safe despite enactment of a law that will merge four of the schemes into one.

In January 2018, Parliament passed the Public Service Security Fund Bill, 2017, which was subsequently assented to by President Magufuli.

The Act repeals the laws that had established the Public Service Pensions Fund (PSPF), Government Employees Provident Fund (GEPF), LAPF Pensions Fund and PPF Pensions Fund.

The four pension funds are to be merged into the Tanzania Public Service Social Security Fund (TPSSF), a behemoth with over Sh5 trillion in assets. The new law had created fears within the social security sub-sector, with senior managers and operational staff believing that they would be adversely impacted.

Under the new setup, public employees who were contributing members of the National Social Security Fund (NSSF) will be transferred to TPSSF.

On the other hand, private sector employees who are currently contributing to the PPF Pensions Fund will be transferred to NSSF, which will henceforth solely cater for private sector workers.

Dr Magufuli assured all social security employees of security of tenure amid the structural overhaul.

Officiating the formal opening of the NMB Bank Plc capital office, as well as the bank’s Kambarage Branch, its private banking branch and the ten-storey PSPF building in Dodoma yesterday, President Magufuli said there was no reason to worry.

“Merging of the pension funds shouldn’t be cause for alarm. Your jobs and positions are safe. The government will conduct a thorough analysis of the situation before initiating any major changes,” he said.

Turning to the banking industry, the President said that although Tanzania is home to over 50 commercial banks, there is a need for the government to keep nurturing growth of the financial sector as a whole.

He showered praise on NMB Bank for maintaining profitability and reducing levels of non-performing loans (NPLs).

“In all other major issues, you are excellent. I just want you to ensure that the dividend increases.”

The government holds a 32 per cent stake in NMB Bank.

Speaking earlier, the deputy minister for Finance and Planning, Dr Ashatu Kijaji, had said NMB Bank’s NPL rate currently stood at 6.4 per cent of its total gross loans.

“This means that NMB Plc is on the right track to meet the threshold set by the Bank of Tanzania, which requires the ratio not to exceed five per cent,” she said.

According to the NMB Bank managing director, Ms Ineke Bussemaker, the bank plays a key role in strengthening financial inclusion in Tanzania – and called upon the government to work with the commercial banks in the country in joint, coordinated efforts to attract savings in the informal sector of the economy into the mainstream of the financial sector.

She said the banking sub-sector went through turbulent times last year, which generally resulted in a fall in profitability.