For many years now, Rwanda has implemented well-designed social security policies that have contributed to better livelihoods, provided protection, engendered confidence and commitment at work, and spurred community and economic growth.
As incomes and the tax base increase, it is easier for the government to generate revenue and invest in social welfare programs that benefit the less fortunate.
Rwanda Social Security Board (RSSB) is mandated to efficiently manage members’ funds and ensure effective value for their contributions. Hence, the institution set priorities for the year 2018/2019. Richard Tusabe, RSSB’s Director-General, told The New Times that RSSB reported a profit of Rwf25 billion for the first half of the 2018/19 fiscal year and is expected to reach Rwf60 billion in profits before the current fiscal year ends on June 30, 2019.
"The performance during the 1st semester of the year was very promising and the priorities that were set during the preparation of the 2018/2019 Action Plan were achieved at a reasonable percentage.”
RSSB building in Musanze.
Among the priorities were increasing contributions collection, maximizing revenues from investments, providing quality services, modernizing RSSB Information Technology Systems, constructing low-cost houses, extending social security coverage, fighting fraud and other malpractices and reviewing and updating laws and related orders.
In Rwanda, RSSB administers social security through medical insurance, pension administration and occupational risk insurance, maternity leave, the new saving scheme of Ejo Heza and health insurance.
RSSB maintains interests in different areas, including in real estate, equity stocks, bank term deposits, treasury bonds and treasury bills, among others.
Maximizing contributions collection
In the 1st semester of 2018-2019, RSSB planned to collect Rwf 81.546 billion as contributions from RSSB subscribers. However, the institution exceeded its target by collecting Rwf 85.327 billion (104.64%) of which Rwf 45.327 billion was from Pensions and Occupational Hazards schemes.
The social security benefits offered by the Pension scheme are divided into two categories, those given to the insured person and those given to the eligible survivors of the pensioner. However, enrolling for pension benefits is compulsory for all salaried workers, regardless of nationality, and active political representatives. The scheme requires a contribution of 3% paid by the employer and 3% by the employee.
For the registration of new employers, employees and affiliates, RSSB targeted to have 700 new active employers, 55,000 active employees and 7,000 new affiliates registered under the Pension scheme. However, 570 new active employers were registered, which represents 81.4% of the target, and 64,825 new employees, 117.9% of the quarterly target, were registered under the scheme.
According to Murekatete Alphonsine, an employer and Director of Lycee Du Lac Muhazi, the school accountant registers all its new employees with RSSB after awarding them a contract. "For us it is a standard procedure for every new employee. It applies to all teachers and supporting staff who are recruited by the school. They pay 3% of their monthly salaries and we pay 5% for them as employers,” says Murekatete.
She adds that previously they had problems and setbacks due to the fact that they used to pay members’ contributions but that has changed. "Today, the contributions are paid promptly to RSSB due to the new changes. We no longer wait to pay at the end of the term like it used to be back then. We now pay contributions monthly and this has helped us not to have arrears with RSSB,” explained Murekatete.
Improved benefit packages
In the 1st semester of 2018-2019, RSSB planned to pay benefits worth Rwf 47.468 billion but ended up paying Rwf 54.268 billion (114.33%). On April 16, 2018, RSSB increased all pension payment benefits for pensioned workers. According to RSSB, the increase saw the overall pension benefits increase by 25%.
This was done in such a way that the lower pension earners were given a higher percentage increment on their pension than higher pension earners plus minimum pension was also increased from Rwf 5,200 to Rwf 13,000. This led to increased satisfaction among pensioners as evidenced by a recent customer satisfaction survey.
With Occupational Hazards benefits, a new list of occupational diseases has been developed and replaces the one that has been in use since 1974. An Invalidity Scale has also been updated. A guiding document is currently being updated that will not only improve the occupational hazards benefit package but also improve the working environment in terms of safety and health.
CSS zigama another of RSSB’s buildings in Kigali.
Many pensioners have accessed their pension and are enjoying retirement with dignity. Types of pension benefits include; Old Age pension (Retirement), the Anticipated pension (Early Retirement), Invalidity pension, Survivors’ pension, Survivors’ lump-sum benefits and Old Age lump-sum benefits. RSSB says that it will spend Rwf 95 billion on members’ benefits and covering health insurance.
Bukuba Fidel, 75, a retired employee says he has reaped from RSSB services from the time he accessed his pension. He says the best thing that can happen to someone after many years of hard work is accessing pension after retirement. "I loved my work and throughout my career I was doing pretty well and was being paid a salary of Rwf 500,000 until 2013 when finally I felt my aging could no longer cope with the stress,” he says.
Today, Bukuba receives retirement benefits of Rwf 149,000 per month which he says has been of much help. "The unique thing about RSSB is the promptness in receiving your pension, you can start collecting your pension once you are 60-65 years of age and it always comes on time,” he says. At this age one is able to use the pension and do some small investments.
He says there are many benefits when one is receiving pension thanks to RSSB and the government of Rwanda and that though he has not yet applied for a loan, he is eligible because he has a monthly pension that goes to his account. "I thank the government of Rwanda and RSSB for their promptness in paying pensioners on time. I first worked in Burundi in 1974 and for 20 years monthly contributions were taken off my salary though I never received a penny for my pension there. But since retiring here in Rwanda in 2014, I have been receiving all my pension dues and I’m really a happy man. I am 75 years old with four grown children whom I am proud of. I am happy to say that a bulk of our living expenses come from my pension plus the profits I make from other investments,” he adds.
Technology improving CBHI collection and coverage
Before the use of ICT in paying for Community-Based Health Insurance (CBHI) commonly known as ‘Mutuelle de Santé’, the number of people registering for Mutuelle was very low compared to those that registered in 2017-2018
Rulisa Alexis, the Director of Mutuelle at RSSB, testifies that the use of technology has helped reduce the time families had to spend to wake up early in the morning to line up to register for the service.
Before it required them to go and pay at a Savings and Credit Cooperative Organisation (SACCO) near them and they were given stamped papers with account numbers to show that they had paid for Mutuelli. "It was difficult for RSSB to prove that money had been paid at the SACCO because of lack of technology. But today with the introduction of Mobi cash in SACCOs, any person who pays is immediately registered by the system,” says Rulisa.
RSSB buildings..
This has solved members’ outcry of long lines, delays and constant theft by some staff of SACCOs. Being able to pay in the comfort of their homes through mobile money has been highly appreciated. By applying this technology, a subscriber will only go to the nearest RSSB office to take their insurance card without wasting their time at local administration offices and banks.
However, RSSB acknowledges that there are challenges since the scheme was put under their management in 2015 because CBHI expenditure continues to exceed member’s contributions calling for the adoption of a CBHI model whose modalities are currently being developed.
Medical insurance makes us feel safe
Mukarukaka Esperance joyously testifies that the Mutuelle de Santé is the miracle she had been waiting for to come to her community and more specifically, to her family. "After many years, I finally gave in to people’s persuasion and accepted to pay and register as a beneficiary of the local health insurance scheme. Every year, I’m among the very first people to pay Mutuelle because of the benefits that come with the health insurance. We formed and joined an association called Dutabarane where all members are given money at the end of the year to pay Mutuelle promptly which has helped us very much,” says Mukarukaka.
She explains that previously, before registering for Mutuelle, she used to suffer from chronic diseases and many other illnesses that come with old age. "I used to spend a lot of money on medical bills and sometimes, many ailments would go untreated due to lack of funds. However, when I decided to register for Mutuelle, I was surprised at how cheap it was and I just went through the formalities and paid. Today not only am I able to get immediate medical treatment, but also the rest of my family have access to health insurance,” she adds.
She, however, adds that though previously one would pay insurance as an individual and immediately start accessing insurance, today it requires every family member to have paid which may be an inconvenience in a way but also a benefit. "Today it requires all the family members to have paid for one to be able to access the health insurance benefits. However, this has also helped in ensuring that all members have access and not only one person in the family. I believe this is one of the reasons that so many people are joining and the numbers of new registrations for Mutuelle are shooting up every day,” says Mukarukaka.
Maternity leave benefits (MLB)
Maternity Leave Benefits was introduced in November 2016 and became operational in 2017. According to provisions of the Law No. 003/2016 establishing and governing maternity leave benefits scheme, "the employer declares and remits collected contribution to the Social Security Administration not later than the fifteenth day of every month following the month of contribution.”
It was designed to promote maternal health of both the mother and the baby through the reimbursement of wages paid to a mother on maternity leave. This has helped in the promotion of equity especially in the private sector because it allows mothers to take a full 12 weeks of maternity leave with full pay unlike before where mothers were allowed 6 weeks with full pay and for the remaining 6 weeks received 20% of their salary.
Ejo Heza long-term savings scheme loved by many
The Ejo Heza long-term saving scheme continues to be loved by many people in Rwanda because of the benefits that one gets when they save voluntarily.
According to the National Institute of Statistics Rwanda (NISR) the number of Rwandans who are over 60 years will have doubled by 2032 yet 94% of those old people are not part of any saving scheme.
In order to address this problem, Ejo Heza, a long-term saving scheme, was introduced in November 2017 to boost the saving culture among Rwandans and also partly to answer the problem of low pension coverage due to a large informal sector.
The Ejo Heza amount collected todate stands at Rwf38 million.
According to Tusabe Richard, the number of those registering on phone has continued to increase every day as they continue to sensitize the public about the saving scheme. "Since its official launch during the 16th National Umushyikirano Council in December last year the scheme has registered 37,496 subscribers.”
Citizens will deposit savings into their long-term savings account and are free to choose how much and when they wish to save. There will be no penalties for missed contributions.
When a subscriber reaches old age their savings will be paid back as a monthly pension. Tusabe added that a non-national member who permanently leaves Rwanda has a right to withdraw the accumulated balance from their long-term savings account as a lump-sum.
RSSB has already launched a coordinated sensitization campaign involving Central and Local Governments leaders and stakeholders and road shows are being conducted upcountry.
RSSB properties changing the Rwandan landscape
RSSB is one of the major investors in the real estate sector in Rwanda today, having been in the trade since 2002. Their assets include Gaculiro, Kagugu and Batsinda estates. Several commercial plazas have been built around the country while Gaculiro Vision City, located on 157 ha of land, with 4,500 units, attracting an investment of about $400m will also contribute to meeting the housing needs in Kigali.
Geographically, RSSB investments cover the whole country, in almost all the districts, especially the real estate sector. When one enters a city, they cannot fail to notice the elegant buildings built by RSSB across the country. The buildings are now a solution to what has been one of Rwanda’s burdening challenges, inadequate housing, office and commercial space.
Vision City is the biggest residential housing project in Rwanda to-date and the flagship in Ultimate Developers Limited’s portfolio. This unprecedented project is situated in the uptown neighborhood of Gaculiro, just 3 km from the Central Business District and 6 km from Kigali International Airport, and offers a wide range of housing that will leave the discerning property lover spoilt for choice. Another ongoing project is the construction of 1,800 houses in Vision City Phase II in partnership with potential investors
From the low-cost Batsinda housing units to the high-end elevated estate with tiered teak seating of Vision City that is dotted with entertainment centers and parklands that grace Gaculiro landscape, RSSB investment efforts are in tandem with meeting EDPRS II housing targets where affordable housing development to support urbanization, expected to reach 35% by 2020, is a high-level priority.
Vision City in Gacuriro.
In the 1st semester of 2018-2019, RSSB had to hire a supervision firm, as well as design and construct 548 units and basic infrastructure of middle cost houses in Batsinda Estate II. Today, the overall construction work is at 12.47%.
According to sources from RSSB, site installation is at 66.72% while substructures work is at 21.51%. Already precast concrete load bearing panels (150/180mm thick panels) is at 20.52%, precast concrete partition panels (100mm thick panels) is at 22.49% and precast concrete stairs have already been installed at 13.40%.
Also in the same semester, RSSB had targeted to construct 1,000 affordable houses in Kinyinya in partnership with potential investors and also start the construction of Nyarutarama – Kinyinya road. Today, a feasibility study to evaluate the project is being done by International Finance Corporation (IFC) consultants and a Memorandum of Understanding between IFC, RSSB, Rwanda Development Bank (BRD), Broad Homes and BSMART Technology was signed on September 11,2018.
Maximizing revenues from investments
Rwanda Social Security Board (RSSB), continues to be a player in the housing sector and its contribution to Rwanda’s socio-economic transformation is commendable.
Besides serving Rwanda’s citizenry through various social security schemes, it has accentuated investments in real estate and property development that benefit high-end and middle-income tenants and is in the process of introducing social housing that is bound to benefit low-income earners.
Currently, RSSB invests in real estate and affordable housing projects which help improve infrastructure and urbanization, partly solving the housing problems in the cities and creating jobs.
The institution has heavily invested in bank term deposits and government securities and these investments have not only been profitable to RSSB but have also contributed to the government treasury and to the financial sector growth. According to the Director-General, Richard Tusabe, on investments, RSSB plans an investment outlay of Rwf 444 billion in the current fiscal year. It has so far invested about 206 billion.
In the 1st semester RSSB expected to get returns on investments worth Rwf 35.771 billion but realized 91.83% returns worth Rwf 32.849 billion. Also, with a budget expenditure plan of Rwf 297.2 billion, the social security board managed to spend Rwf 268.9 billion (90%). The total value of RSSB shareholding is Rwf 338.59 billion whereas the shares paid amount to Rwf 332.75 billion, that is 98.08% of the total shareholding.
Collected revenues from RSSB properties
During the 1st Semester, FY 2018/2019, the total revenues collected from RSSB commercial buildings as rental income across the country are Rwf 1,442,132,026 which is 98.6% of the expected revenues. The total net income was Rwf 805,565,627. The expenditures incurred on those buildings, as management fees and other costs, amounted to Rwf 805,565,627 which represents 44.1% of the revenues.Among those buildings are Gaculiro 2020 Estate, Nyanza Pension Plaza, Musanze Pension Plaza, Karongi Pension Plaza, Rwamagana Pension Plaza, Grand Pension Plaza, Doctors Plaza (Tower I), Doctors Plaza (Tower II), Kiyovu House, Mutara Entreprises, Crystal Plaza and Kacyiru Executive Apartments.
Improving service delivery
RSSB aims at abiding by high service delivery standards and concrete strategies in that regard have been put in place. Comprehensive RSSB service delivery have been developed and displayed across all RSSB offices. Regular customer satisfaction surveys are conducted and steering committees have been set up to follow the implementation plus recommendations have been established. In addition, RSSB website is currently being re-designed and updated to accommodate all necessary online services and to provide a comprehensive and in-depth review of RSSB’s main responsibilities, its mission and how it is accomplished, as well as its vision and corporate values.