Public pension assets grow 34% as contributions rise

Public pension assets reached Rwf 2.4 trillion in the third quarter ended September 30, a 33.8 per cent growth compared to the same period last year, data from the National Bank of Rwanda (BNR) shows. According to the Central Bank, the expansion in public pension assets was driven primarily by higher member contributions and stronger investment returns. The growth was further supported by Ejo Heza, the long-term voluntary savings and pension scheme administered by the Rwanda Social Security Board (RSSB), which also oversees the public pension system. Ejo Heza recorded a 29.2 per cent rise in total assets, reaching Rwf84 billion, which the bank attributed to intensified mobilisation efforts, with the informal sector remaining the largest source of membership. ALSO READ: Mandatory pension contributions to double in January Benjamin Cyusa, the Retail Sales Manager at Prime Insurance, told The New Times that rising inflation had partly pushed the need to increase contributions, which in turn helped expand the fund. ALSO READ: Retirees’ body appeals for matching pension with cost of living “RSSB’s decision to raise contribution rates has clearly played a role,” he weighed in. Last year, RSSB revised the contribution rate for employees in the formal sector from 6 per cent to 12 per cent of their monthly gross salary. The rate is expected to rise gradually to 20 per cent by 2030. The previous 6 per cent threshold had been in place since 1962, despite the country’s life expectancy increasing from 47 years then to 69 years in 2022. ‘Need to strengthen fund’ Speciose Mukakarangwa, who represents the pensioners association in Kicukiro District, City of Kigali, said that although the assets of the public pension fund is expanding, there is a need for further adjustment to keep up with the cost of living trends. “Although pension payments were last adjusted in 2018, there is still a need for adjustments to keep up with depreciation, and that is only possible when the fund itself is strengthened,” she noted. In 2018, the pension benefit amounts paid by RSSB were revised upward under Presidential Order 69 of 2018. The Order specifically increased the minimum pension and occupational hazard benefits for pensioners and beneficiaries under RSSB. The 2018 Order set the minimum monthly pension/occupational-hazard benefit at Rwf13,000. Before that, the minimum was lower, with some pensioners receiving as low as Rwf2,800 or Rwf5,200 in benefits per month. Emmanuel Ruvugwaho, a pension beneficiary and head of the pensioners’ association in Huye District in the Southern Province, shared similar concerns with Mukakarangwa, saying that pensioners hoped for more regular adjustments. “When I retired in 2013, we waited until 2018 for an adjustment, then again in 2024. It is a long gap,” he said, adding that increased contributions should also translate into improved benefits in the future. He also noted that more people were contributing to supplementary schemes such as Ejo Heza, which he said was encouraging and hoped will boost long-term savings. Earlier this year, RSSB announced that it was undertaking reforms that will see pension benefits increase further. As part of the reforms, retirees in every category were expected to receive an increment, based on the pensioners' benefits brackets outlined in Article 4 of the presidential order increasing pension and occupational hazards benefits granted by the public entity. Pensioners in the lowest benefit category would receive the highest percentage increase than those in other categories, with retirees in the largest income group getting the smallest percentage rise, following the adjustments made. For instance, the minimum annual pension benefits were set set to rise by 159.3 per cent, from Rwf13,000 to 33,710, while retirees receiving Rwf20,000 per month would get Rwf47,710, an increment of 138.5 per cent from the current amount. Beneficiaries receiving Rwf50,000 would see their benefits increase by 85.4 per cent to Rwf92,710, while those receiving Rwf1 million in monthly pension, would get an increase of 9.5 per cent to Rwf1,095,210.

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Public pension assets grow 34% as contributions rise