Lawmakers have called for revision of the minimum wage to reflect current realities.
This came up yesterday as the Committee on Social Affairs discussed the Bill governing the pension scheme.
The remarks came after the MPs heard that a daily minimum inter-professional wage (SMIG) for the ordinary worker as set in 1974, at Rwf100 per day, is still valid.
Committee chairperson Marie Rose Mureshyankwano noted that the minimum wage is an issue that parliament ought to take seriously.
This was after an official from the Rwanda Social Security Board (RSSB) explained the risks involved.
Yvonne Mujawabega, of the RSSB’s Benefits Division, said: “The absence of SMIG explains why people have little savings with RSSB.”
She recommended that SMIG be revised especially as it protects very low income earners.
Mureshyankwano said it was not necessary to debate the Bill without SMIG.
But MP Gastone Rusiha noted that SMIG is in place but outdated, adding that the line minister should be summoned to provide details.
Alloys Nsengiyumva, an official from the Ministry of Finance (Minecofin), told the MPs that all pension benefit calculations are based on monthly salaries, not on SMIG which, he said, is only used when considering people without any known monthly salary.
The lawmakers were considering modalities for “anticipated benefits” and what appeared to be complex formulas used to compute monthly pension benefits of individuals who would suffer premature physical or mental wearing-out before attaining retirement age and are unable to continue working for a salary.
Nsengiyumva said such people are entitled to early retirement pension benefits but need to fulfill some conditions.
For a pension scheme member to get retirement benefits, they must have contributed for at least 15 years, be at least 60 years of age and have stopped any salaried activity.
Jean Paul Sekabuke, an official from RSSB, explained that once one has completed 15 years working, they can get 30 per cent of their monthly average salary of the last five career years.
For every year one works after the initial 15 years in service, they get an extra two per cent.
However, Sekabuke said that for those who do not make the requisite 15 years in employment, what is considered is their average salary of the last five years, and then a lump sum is calculated.
But when calculations indicate that someone will get very little benefits, he said, it is where a standard and realistic SMIG would be helpful.
Debate on the draft law governing the organisation of pension scheme has dragged in Parliament for some time.
During deliberations in the same committee, last year, MPs insisted that Rwandans must get the best out of the Pension Scheme legislation.