Calls grow to lower retirement age

Workers at ADMA Biscuit factory in Kigali. Debate on retirement age continues. / Timothy Kisambira.
Workers at ADMA Biscuit factory in Kigali. Debate on retirement age continues. / Timothy Kisambira.

Members of Parliament, Trade Unions and Association of Pensioners in Rwanda have called for the reduction of early retirement age cap from the current minimum of 60 years to 55 years, arguing this would create more opportunities for young graduates to get jobs, while it would allow elderly employees to retire while still relatively energetic.

United Nations defines elderly as people aged 60 years and above. In Rwanda, the earliest someone can retire under the law is at 60 years, while late retirement age is 65 years.

The 2015 law governing the organisation of pension schemes in Rwanda stipulates that for a member of the pension scheme to access monthly old-age benefits, they shall be at least 60 years old.

Speaking to The New Times, the president of Labour Congress and Workers’ Brotherhood in Rwanda (COTRAF), Dominique Bicamumpaka, said 60 years (as minimum retirement age) was set without considering the various jobs that people carry out, “such as work which often damage one’s back, workers in the construction sector, and in mining sector where employees work inside mine shafts and do not get enough oxygen”.

Bicamumpaka said many lead poor lives after retirement as they do not get their entire salaries.

“Many of them, therefore, do not live long and pass away shortly after retirement,” he said.

“All those live in conditions that wear them, many of them hardly reach 60 years,” he said.

He also cited the example of low ranking soldiers who retire at about 40 years of age because of their highly demanding physical roles, while senior ranking officers, such as generals, can retire at an older age because their responsibilities are not as physically demanding.

The president of the Association of Pensioners in Rwanda, Modeste Munyuzangabo, told The New Times, that that its fair and reasonable that an employee retires at 55.

Rwanda’s life expectancy is 66.1 years, on average.

Commenting on the issue, MP Theogene Munyangeyo, said that, previously, many students would complete university at the age of 28, but currently many complete varsity when they are still as young as 22 or 23.

Today most youths join the labour market much younger than was the case previously, he said.

He said that, in technical fields in the future, people will be employed as a result of what they know, not because of their university degrees, which means that they might even join the labour market at 18.

“So, this means that young people will even be joining the the labour market at 18. So, when you spend 27 years in a public institution, you have gained knowledge or experience which can make you leave the post for others,” he said.

He pointed out that labour research should be carried in line with the national interests. MP Munyangeyo argued that when workers retire at 55 years, the Fund does not lose “because there will be new employees entering the job market and making contributions to the pension scheme”.

When workers delay their retirement, they may also delay claiming social security benefits. Though delayed benefit claims causes a temporary loss of transfer of income, it leads to “a future increase in monthly pension payments over much of the worker’s remaining life,” according to a research paper by Barry Bosworth & Gary Burtless, from The Brookings Institution, and Kan Zhang from George Washington University in January 2016.

While presenting the rationale of the new draft law governing labour in Rwanda to the Chamber of Deputies earlier this month, Fanfan Rwanyindo, the Minister for Public Service and Labour (MIFOTRA), said the Ministry would discuss the issue with Rwanda Social Security Board (RSSB) and the Ministry of Finance so that they decide on the way forward, adding that the issue involves various institutions.

Bicamumpaka said that the retirees can be consulted for advice in various fields of their specialisation and experience, which can help young employees in their responsibilities.

RSSB speaks out

Commenting on the issue, Moses Kazoora, the RSSB director of communications, said the concern raised is based on the law, noting that it will require consulting different government organs and stakeholders to get their view on the way forward.

The stats

The unemployment rate among university graduates was at 15.9 per cent in February 2017, according to the Labour Force Survey report published by the National Institute of Statistics of Rwanda.

Rwanda’s public sector employs approximately 104,000 people, (ncluding about 62,000 teachers, according to information from MIFOTRA.

Figures from the ministry also show that less than 10 per cent share of the country’s entire workforce is employed in the public sector, while the private sector employs the remaining 90 per cent.

Less than 10 per cent of Rwandan workforce contributes to the pension scheme. According to the National Bank of Rwanda, by the end of June 2017, the pension scheme had 446,409 contributors and 17,378 pensioners.

Between June 2016 and June 2017, total contribution to the pension fund grew by 4 per cent, to Rwf77.5 billion up from Rwf74.5 billion.

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