The Social Security of Rwanda (SSFR) says it will maintain interest rates on pensioners’ funds at two percent annually, despite making huge profits.
The public pension body said in a report about its quarterly performance that revenues jumped to Rwf8.7 billion in the 3rd quarter of the year 2010/2011, 11 percent higher than the projected Rwf7.8 billion
The report said the performance was occasioned by bonuses paid by particular organisations at the end of last year.
SSFR pays 30 percent to members who have saved with the Fund for 15 years, which technically translates to two percent annually.
Afrique Ramba, the Director General of SSFR says that the rate, which has not been revised in many years, is good enough considering that employee contribution is fixed at only eight percent of the gross salary.
“If you have contributed for 15 years and go into retirement, you get 30 percent interest on your gross salary. Any number of years that you work beyond the fifteen, we add you two percent.”
He added that the Rwandan system is different from other countries, where members contribute on individual accounts within the fund.
“At the end of the year, their profits are determined by how much they put in. In other words, what you put in is what you get out plus interest,” Ramba said.
Concerning employees who do not remit contribution, Ramba said the Fund is beefing up countrywide sensitisation programs to show the importance of contribution compliance.
“We also carry out several enforcements where we audit non-contributors and panelise them according to the law,”
“The Fund targets to close the financial year on a high note so that we can continue to efficiently manage members’ funds and provide high quality service to our beneficiaries,” he said.
The report says that the Fund registered 2,037 employers and 12,074 employees. It paid benefits worth Rwf1.6 billion to its members and also audited 81 employee cases out of 165 it planned to audit during the same period, according to the reports.