New pension proposal will increase benefits - RSSB

The Rwanda Social Security Board (RSSB) has said that a new pension proposal will increase benefits for pensioners after months of protracted calls by pensioners to have their monthly benefits increased so that they can lead a decent life. Stressing how prices at the market have gone higher which necessitates pension increment, Modest Munyuzangabo, the President of Rwanda Pensioners’ Association (ARR) told Sunday Times that a kilogramme of potato was Rwf1 in 1969 but these days, it has soared to Rwf350. He recounted that in 1969, Rwf5,000 salary would help the earner pay for rent, provide for his/her family over a month and cover some other needs. But, he said that there are retired workers who get as little as Rwf5,000 monthly benefits, which cannot buy even buy a sack of charcoal. The study on the living conditions of pensioners and small income earner workers in Rwanda was published in October 2014, and showed that there are 8.1% of pensioners who earn less than Rwf5,000. It indicated that a pensioner’s average expenses on food and drinks was Rwf30,000. Speaking to Sunday Times, Jonathan Gatera, Director General of RSSB, said that in the proposal, they indicated how much should be increased on the pension benefits that the retired elders are getting as the pension body is looking for a consultant entity to carry out an actuarial assessment study showing the state of the pension scheme and consider pension increment. The study be carried out in January next year (2017). “We made the proposal for pension increment and how it can be done such that those who get little benefits get an increment and those who earn much get less. That is the approach we used,” he said noting that he cannot go into the details of the document before it gets approved by the cabinet. He also said they hope that the evaluation process for bidders for the consultancy tender will be done and the tender awarded to a competent bidder. Petitioning for pension rise In a letter dated June 12, 2016, pensioners, through their association, petitioned MINECOFIN to increase their pension benefits. The last pension increment was in 2002 yet salaries for civil servants has been increasing to respond to the rising prices at the market. Dominique Bicamumpaka, the President of Labour Congress and Workers’ Fraternity (COTRAF) said that there is a need to make the pensioners live a decent life because they worked for the development of their country. “The mandate of RSSB is to ensure that the retired enjoy welfare as they did while they were still workers,” he said noting that they proposed at least Rwf26,000 monthly benefits for a pensioner in the countryside. In some countries, Munyuzangabo said, pension increases anytime (workers’) salary increases in response to price indicators at the market- what is called indexation. But, the pensioners said that in case indexation approach is not possible in Rwanda, pension should be increased after a study on the state of the pension scheme and the cost of living of the time. The Minister of MINECOFIN, Claver Gatete said that “indeed we know the issue and attach importance to it. Government is considering it and a solution will be found soon.” According to the Law Governing the Organization of Pension Schemes in Rwanda enacted on March 30, 2015, the public entity in charge of pension scheme shall carry out an actuarial study for pension scheme at least once every five (5) years. Where the actuarial study shows a possible negative impact on economy, the amount of contributions shall be increased according to the provisions of this Law. Basing on the findings of the actuarial study provided, pension benefits may also be increased. A Presidential Order shall determine related implementation modalities, the Law stipulates. “We want pension increment so that it matches the prices at the market and pensioners to lead decent lives,” Munyuzangabo said. Meanwhile, Munyuzangabo expressed that the delay in pension rise is largely attributed to lack of pensioners’ presence at RSSB’s board of directors noting that “if we have someone to advocate for us in that board, we would have got our pension benefits increased.” Currently, the Rwanda Pensioners’ Association (ARR) has 7,504 members. So far, figures from RSSB show that the social security board covers about 16,000 active employers and 460,000 employees contributing to the pension scheme. Currently in Rwanda, the contribution rate to pension scheme is 6% of the gross salary, whose payment is equally covered by the employer and the employee. Only about 10% of Rwandans have subscribed to the pension scheme. The social security scheme in the country collected about Rwf60 billion in premiums last year and it targeted to collect Rwf65 billion this year, 2016. The 11 resolution of the National Dialogue Council “Umushyikirano” in 2013 stated that a study should be carried out to match pension benefits with the situation at the market. A 2013 report by Government Actuary’s Department (GAD) recommended that Rwandan employers and employees should contribute 10 per cent instead of current 6 per cent to pension scheme if benefits are to increase and for the pension scheme to be sustainable. editorial@newtimes.co.rw

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New pension proposal will increase benefits - RSSB