REPORT OF THE BOARD OF TRUSTEES
pspf for peace of mind
for the year ended 30 June 2013 (continued)
3. VISION
To be the provider of choice of social security services in the country
4. MISSION
The Fund is committed to providing competitive Social Security Services to our members using dedicated staff and appropriate technology.
5. SCHEMES AND FUNDING
The Fund operates two types of Social Security Schemes which are the mandatory and supplementary schemes whose design and funding is explained below. 5.1 Mandatory Scheme
Mandatory scheme is a contributory scheme which operates under defined benefit arrangement. The current contribution rates under mandatory scheme are 15% for employers and 5% for employees which make a total contribution of 20% of member’s salary. However, any contribution rates agreed between an employer and an employee that would make a total contribution rate of 20% of the employee’s salary is acceptable by the Fund.
Contributions are deducted by employers and remitted to the Fund on monthly basis with 30 days grace period. If contributions are not remitted to the Fund within 30 days from the month when salary payment is due, then additional contribution by way of penalty at the rate of 5% per month or part of the month is levied on the delayed contributions until when the contribution is remitted. These rates are determined by actuaries and are sufficient to accumulate assets to pay benefits when due. The accrued investment and such sums as may be appropriated by the Parliament for the purpose of the Fund also form part of the sources of funding.
Under the provisions of the Public Service Retirement Benefits Act No. 2 of 1999, effective commencement date of the Fund with respect to collection of contributions payable to the mandatory scheme was 1 July 1999. The payment of benefits effectively commenced on 1 July 2004. The benefits accrued prior to 1 July 1999 for the Fund’s retirees are met by the Fund but require explicit funding from the Government of Tanzania. Under the transitional provisions of the said Act, all benefits falling due during the 5 year transitional period from 1 July 1999 to 30 June 2004 were paid under the Pensions Ordinance and from the Consolidated Fund. Hence no benefit payments were made from the Fund during the transitional period. 5.2 Supplementary Scheme
Mandatory scheme is a contributory scheme which operates under defined contribution arrangement. The Supplementary Scheme officially started on 7 March 2013. Minimum contribution under supplementary scheme is TZS 10,000. PSPF annual REPORT FOR THE YEAR ENDED 30Th JUNE 2013
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