AS of yesterday up to 10,414 retirees who left service starting from July 2022 and received benefits calculated using the old formula, have been reimbursed the due amounts based on the new formula.

Ridhiwani Kikwete, the Labour, Youth, Employment and Persons with Disabilities state minister in the Prime Minister's Office (PMO), disclosed this at a seminar for prospective retirees of the Public Service Social Security Fund (PSSSF) in Dar es Salaam yesterday.

Additionally, 2,479 new retirees as of July 1, 2024 have already received their benefits under the updated calculation formula, with the process ongoing as directed by President Samia Suluhu Hassan.

The government had addressed retirees' concerns by introducing improvements in the 2024/25 budget allocations, including updating the benefits calculation formula, he said

Previously, retirees under both PSSSF and the National Social Security Fund (NSSF) were paid at a flat rate of 25 percent. However, after public complaints, the rate was raised to 33 percent and in July the government introduced a new formula—40 percent for PSSSF retirees and 35 percent for NSSF retirees—effectively creating two initial payment systems.

In 2017 media investigations highlighted concerns with the previous formula, which uniformly applied a 25 percent lump-sum payout following the merger of the Public Service Pension Fund (PSPF), the Parastatal Pensions Fund (PPF), the Local Government Workers Pension Fund (LAPF), and the Government Employees Pension Fund (GEPF) to form the PSSSF.

This merger was initiated to rescue the PSPF which faced financial strain from retirees’ debts, with the NSSF remaining unaffected, while PSSSF regulations set lump-sum payments at 25 percent, down from the 50 percent offered by the pre-merger funds (excluding NSSF).

The minister announced further steps to improve retirees’ benefits as some retirees receive a minimum of 100,000/- per month. From early next year, the minimum monthly pension will be increased to 150,000/- with those receiving pensions above 150,000/- handed a two percent increment.

In addition, upon a retiree's death, the fund will provide 500,000/- for burial expenses, with dependents recognized by the fund’s regulations receiving a lump sum equivalent to 36 months of the deceased’s pension.

“This policy was initially introduced in July 2022, but only for retirees paid under the new formula. Starting January 2025, it will apply to all retirees, including those paid under old formulas from the merged funds,” he asserted.

He urged PSSSF to establish efficient systems to ensure beneficiaries receive their rightful payments, as the government closely monitors PSSSF to guarantee the safety of members’ contributions.”

Abdul-Razaq Badru, the PSSSF director-general, explained progress in service provision, noting that 746 employers were engaged in seminars last year, with plans to reach 878 employers this year.

“One of our core services is paying pensions. Since its inception, the fund has paid out 10.46trn/- in benefits to 310,458 beneficiaries,” he said, affirming that during 2024/2025 the fund will pay retirement and other benefits totalling 560bn/- to 11,622 retirees.

By year’s end, total benefits paid will reach around 1.5trn/-, he added.