Only 6 % Rwandans have social security cover

Only six percent of all Rwandans subscribe to the Social Security Fund of Rwanda (SSFR), the Lower Chamber of Parliament heard yesterday.
L-R: CONTRIBUTED: Juvenal Nkusi, PLANNING WAY FORWARD: Vincent Karega.
L-R: CONTRIBUTED: Juvenal Nkusi, PLANNING WAY FORWARD: Vincent Karega.

Only six percent of all Rwandans subscribe to the Social Security Fund of Rwanda (SSFR), the Lower Chamber of Parliament heard yesterday.

Vincent Karega, the State Minister for Minerals and Natural Resources, told the lawmakers yesterday that the government was devising a way of helping all Rwandans from both private and government to save for retirement.

Karega was in parliament as a government emmisary in a consultative meeting with the lawmakers about the ongoing reforms within SSFR.

Karega said in his presentation that pension coverage is generally limited to individuals who are employees in the formal sector who make approximately seven percent of the working population.

However, the actual estimates indicate that only 5.6 percent of the working population is covered by the social security policy.

According to Karega’s presentation, 48,363 Rwandan pensioners were receiving old age pensions as of 2006.

Information obtained by The New Times also indicates that the average monthly pension is about 34,000 RwF (US$ 63) and individuals are only eligible for a monthly pension between the age of 55 and 65 if they have accumulated 15 years of service
Karega was accompanied by Henry Gaperi; the Director General of SSFR, Francois Ngarambe; the Executive Secretary of Financial Sector Development Programme and the RAMA boss; Dr. Innocent Gakwaya.

The employer pays five percent of the gross salary for his employee, whose three percent is sent to the pension branch and 2 percent to the branch of occupational risks.

Provident Fund
Karega told lawmakers that  as reforms progress, the government is considering putting in place a ‘Provident Fund’ that will help Rwandans save for long term investments like housing and tuition and will also  boost their pensions.

The bill for the ‘Provident Fund’ is expected to be tabled before Parliament soon.

It is an amendment to the Social Security Act of 2006, seeking to create a Provident Fund to which citizens and government will be contributors. The fund will be supervised and guaranteed by government.

MP Juvenal Nkusi however took to task Karega’s panel to explain the viability of the ‘Provident Fund’ at the time when most beneficiaries of SSFR were not getting their benefits as expected.

“We are here discussing about the Provident Fund and yet most people who started saving their money way back in the 70s are not getting their pensions as expected. Why does a beneficiary have to get his money after every three months in this Information Technology era?,” he asked

Karega explained that the original laws chose to pay pensioners every three months to save them the trouble to of making trips every month.

He also said that the law considered the fact that money amassed over three months was more useful to those who were investing in other businesses during retirement.

“The law originally considered that it would be unwise to make a retired person make trips every now and then and thus instituted that 3 month period. We are going through reforms, so this may also change if need arises,” he said.

MP Jean Baptiste Zimulinda inquired about the plight of children whose parents were killed during the Genocide and yet they had saved with SSFR.

“My question concerns the children who lost their parents during the genocide and were too young to follow up on their parents’ savings yet it’s their rightful inheritance. What will be their next option? ,” he asked

Ngarambe, who is also a former Director General of SSFR explained to Zimulinda that the surviving children have only ten years to follow up on their parents’ benefits but would not be eligible if they are adults.

He however reminded that other family members may be able to benefit from these funds if they are minors, elderly or disabled.

Another MP asked why the SSFR made money from those who save with it but never asked for opinions before it invested their money in deals that were too expensive for them to be involved in.

To this, Gaperi said: “I do not know where the perception that SSFR houses are expensive comes from. The houses that we built in Gaculiro were at Rfw 27m three years ago. Is that really what we call too expensive?” he wondered.

SSFR is a public institution with financial autonomy and is in-charge of administering the social security scheme instituted in 1962.


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