KIGALI - The Ministry of Finance is defending a bill in parliament that if passed into law, shall oblige all Rwandans of working age to save part of their incomes with government.
The bill which is an amendment to the Social Security Act of 2006, seeks to create a Provident Fund to which citizens and government will be contributors.
A Provident Fund is one of the tools governments and private individuals use to raise funds for long term investments and to boost pensions.
According to the bill, this fund will be managed by the government.
Defending the bill during a Parliamentary Standing Committee on Social Affairs sitting yesterday, the Executive Secretary of Financial Sector Development Programme, Francois Ngarambe, said the fund is one of the fudamental pillars of social security policy adopted by government.
“The fund will be supervised and guaranteed by government,” Ngarambe told The New Times in an interview at Parliamentary Buildings yesterday.
He told the committee which was chaired by its president, Specioza Mukandutiye, that contributors to the fund will not be limited to salaried employees.
He said that contributors will benefit from the fund through affordable housing schemes among other things.
Benefits and investments are exempted from taxes and duties, according to the legislation.
The law insists that the management of the fund must conform to international accounting standards and invest the reserves in a prudent and secure manner.
The fund will be under Rwanda Social Security Board which shall be created by a merger of the current Social Security Fund of Rwanda and RAMA, the public medical insurance scheme.
The social security board will be an umbrella of health insurance and pension regimes.
However, the law stipulates that an actuarial study on all regimes will be conducted periodically to determine which regime is making profit or loss.
“Every regime shall have its reserves and accounted differently,” Ngarambe told the committee.