Harmonise RSSB laws to accommodate non-citizens

As the region continues to celebrate the strides towards the integration of East African Community, a fundamental area of integration has largely escaped policymakers. This is harmonising national social security policies in member countries. From different benefit structures to haphazard social security schemes in some countries, member states largely remain with no uniform or even sound national social security policies. Considering that the region’s greatest asset remains its people, the absence of uniform national social security policies will for a long time hinder the transfer of human capital and general social harmony. Indeed, it’s an irony that Rwanda, one of the top performers in actualising policies towards regional integration today, remains the only country in the region that does not have a provision for immediate portability of accumulated benefits under the national social security scheme for non-citizens. The law establishing RSSB provides for mandatory admission for non-citizens working in Rwanda. A corresponding provision for benefits payable does not however confer non-citizens leaving Rwanda permanently with immediate access to their savings. Indeed, the law is explicit that the pension benefits are not transferrable abroad if the beneficiary no longer resides in Rwanda save for case of reciprocal agreements or international conventions. In all the other countries, the respective laws expressly provide for immigration benefits and therefore non-citizens leaving have immediate access to their accumulated retirement benefits upon leaving the other countries. Harmonizing national social security schemes in the integration of East African Community is a fundamental aspect of integration. Besides the countries operating schemes with different benefit structures, the contribution rates and benefits vary widely. Rwanda is not the only country with a defined benefits scheme as South Sudan, Burundi and Tanzania operate such a scheme. What is unique however is that only Rwanda does not have immediate immigration benefits for non-citizens permanently leaving the country. There is therefore urgent need to amend the laws regulating the RSSB to allow non-citizens immediate access of their savings should they opt to leave Rwanda permanently. There are numerous benefits to be gained in allowing non-citizens to access their accrued benefits. Some of the benefits include reducing the liability on the part of the Government and future members. Currently it is the Government of Rwanda that guarantees or insures the benefits payable under the RSSB in accordance with the provisions of law No. 05/2015 of 30/03/2015 governing the organization of pension schemes. Defined benefit pension schemes are designed to compensate long service or membership while penalising young and early withdrawals. As more young members leave such a scheme their surrender values or actuarial reserves are discounted at the point of withdrawal to take into consideration future uncertainties. Liabilities of such members are actually crystalized at the point they withdraw from the scheme thereby reducing future liability. It is therefore important to note that paying off such members who leave reduces future liability on the part of RSSB and by extension the Government. Today it may not dawn on policy makers that retaining membership of non-citizens even after they have left the country in itself means insuring the benefits of such members. When investments are underperforming, the liability shifts to future members who would be required to increase their contributions to guarantee the same level of benefits promised to the members who have left. The question then would be why current and future members should be bound to fund benefits payable to former members who are non-nationals and may also be enjoying other social security benefits in their respective countries. Another advantage with paying off non-citizens on leaving is that it would improve member perception thereby increasing compliance on the part of foreign investors. Further, there are bound to be future administrative challenges of locating deferred members who have left the country as their numbers increase. The writer is a Pensions Consultant. The views expressed in this article are of the author and do not necessarily represent those of the New Times Publications.

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Harmonise RSSB laws to accommodate non-citizens