The Government of Rwanda and the Social Security Fund of Rwanda have reached an agreement on how the former should pay arrears that accumulated between 1999 and 2004, stemming from employee contributions from government institutions.
Government will pay Rwf 600 million during the next financial year, while the rest would be paid in instalments. Government liability to the public pension body stands at Rwf2 billion.
“We always pay arrears of contributions that were not paid by public institutions…depending on the terms agreed,” Anastase Murekezi, the Minister of Labour and Public Service said in a press conference last week.
Government targets to collect Rwf30 billion from 300,000 registered workers this year up from Rwf5 billion in 2005.
The law mandates all employers to declare, on a quarterly basis, the amount of money they would submit to the fund.
The amount, which goes into an employee’s social security account, consists of a 5 percent employer’s contribution and 3 percent of an employee’s salary.
However, SSFR officials say that while contributions from government institutions have improved, statistics indicate that many employers do not remit the money to their employees’ social security accounts.
“The figures show that a significant number of workers are being robbed by their employers as their contributions are not remitted to the National Social Security Fund,” said Daniel Kayonga, the Public Relations Officer of SSFR.
According to Kayonga, some of the arrears accumulated by public institutions were driven by ignorance about the law. He, however, observed that the trend has since reversed after the fund upped its education and sensitisation campaign.
But he lamented that some employers deliberately under-declare their employees’ salaries, in order to contribute a smaller amount to the fund. He added that others deduct the money from their employees but withhold the amounts instead of contributing it to the fund.
“We do not have a cash reward to any member of the public who gives information that can lead to confirmation that an employer is not remitting employees’ contributions, but I’m confident that the person will benefit beyond any prize,” Kayonga said.
Employers with two or more workers are by law required to register with NSSF and pay contributions for each of the employees on a monthly basis as long as the salary is above Rwf15, 000.
Director General of NSSF, Ramba Africa, revealed that once the company is identified as a defaulting employer, the fund confiscates the company’s property like cars.
“It is routine, it involves negotiations, enforcement and failure to comply, sanctions like freezing assets are imposed,” Ramba emphasised.
The unpaid contributions are charged up to 3 percent interest rate of the total amount per month and the figure accumulates to 36 percent in a year.