Employers told to remit social security funds
As the world marked the International Labour Day yesterday, the Director General of RSSB, Angelique Kantengwa, called on all employers in the country to remit social contributions of their employees, citing that only 10 per cent of businesses pay on time.
“My message to employers is that they must respect the rights of their employees by remitting social security funds. This motivates employees to work well knowing that their pensions and occupational hazards are covered,” Kantengwa said.
Pension is supposed to be paid against gross salary not basic…when audits were conducted, we realised these anomalies and with the penalties that attracted by the delays, the sums became too much for them but we encourage payment in instalments<
“The compliance rate is at 10 percent, which is okay by African standards but still very low. Our plan is to increase compliance of paying remittances to 60 per cent by 2015.”
The Rwanda Social Security Board of Rwanda (RSSB) released Rwf12.6 billion within nine months in form of pensions and medical insurance payments to its customers, indicating a steady movement towards achieving its annual target.
The pension house has approximately three months left to achieve its target to pay Rwf18 billion this financial year which ends in June.
Official figures indicate that Rwf49 billion have so far been remitted to the body, out of its targeted Rwf66.6b by the end of this financial year.
Small and medium businesses in Kigali City evade paying remittances, according to RSSB’s Director of Pensions and Occupational Hazard, Oswald Munyandekwe.
“Kigali has a low compliance rate, contributing 45 per cent of all remittances collected in the country, yet it has the concentration of most businesses. This is because many SME owners evade our officials and some even go to extreme limits by renaming their companies or relocating premises of their businesses,” Munyandekwe said.
“However, our plan is to increase awareness and tell them the importance of paying remittances and also increase the number of bailiffs operating in the capital.”
RSSB has at least fifty bailiffs spread across all districts and are empowered by law to collect remittances on behalf of the board.
According to Munyandekwe, the bailiffs have authority to attach and auction property of companies that have defaulted on employees’ contributions.
Some government institutions were also thrown in the light for not remitting funds to the body and were warned against infringing on the national labour laws.
“There are a few government institutions that are completely not compliant and have failed to remit social security funds; they employ many people and it would only be fair to these employees if their institutions started co mplying,” Kantengwa said in an interview.
According to Munyandekwe, most government institutions accumulated arrears to the pension body before 2006 harmonisation of salaries for public servants.
Before the harmonisation, most institutions were declaring only basic salaries for employees, which was by then a small fraction of their take home.
“By law, pension is supposed to be paid against gross salary not basic…when audits were conducted, we realised these anomalies and with the penalties that attracted by the delays, the sums became too much for them but we encourage payment in instalments,” he said.
RSSB was established in 2010 after a merger between Social Security Fund of Rwanda (SSFR) and Rwanda Health Insurance Fund (RAMA), with the mandate to provide high quality social security services.
It has 30 branches and over 500 staff operating countrywide.
Contact email: ivan.mugisha[at]newtimes.co.rw