Finance Minister Dr. Mwigulu Nchemba. Photo: Courtesy
Tanzania MPs Grill Finance Minister: Pension Reforms and Compensation Demands Take Center Stage
By Adonis Byemelwa
In a heated session of the Tanzanian Parliament, nine Members of Parliament (MPs) grilled Finance Minister Dr. Mwigulu Nchemba regarding compensation for those displaced by development projects and pension payments, including the calculation method for lump-sum retirement benefits.
Rita Kabati initiated the questioning, inquiring about the government’s progress in revising the formula for lump-sum pension benefits. Kabati noted that retirees frequently complain about this issue, which MPs often encounter when visiting their constituencies. Dr. Mwigulu responded that the government and labor unions have agreed on areas they are working on and will announce the completion at an appropriate time.
Rehema Migila highlighted research indicating a significant decrease in Tanzanian life expectancy. She pointed out that retirees, who often face illnesses and hardships after the retirement age of 60, suffer from stress and difficult living conditions. She questioned whether the government plans to increase the lump-sum pension benefits from 33% to 80% to allow retirees to enjoy their benefits during their remaining years. Dr. Mwigulu responded that the issue is under review by the sectoral ministry and added that life expectancy has actually increased.
Hassan Mtenga raised concerns about his Mtwara Urban constituency, where people are owed over 600 million shillings from the Pride Fund, which Dr. Mwigulu had promised to settle since 2021. Dr. Mwigulu acknowledged the MP’s persistent follow-up and indicated that the government is completing the necessary procedures. He suggested meeting with his experts after the Q&A session to discuss the progress.
Priscus Tarimo questioned when the government will introduce a bill to Parliament to adjust the pensions of long-retired individuals to match those of recent retirees. Dr. Mwigulu affirmed that this issue is part of the ongoing work aimed at improving pension payments.
Zacharia Issay noted that in 1985, the government retired public servants en masse and that some of those individuals are still alive. He questioned whether it is time for the government to reconsider the lump-sum retirement payments to provide these retirees with pensions. Dr. Mwigulu explained that pension payments are formula-based and tied to contributions, but the issue is being considered.
Agnes Hokororo asked about the government’s plan to pay benefits to veterans of World War II who continue to claim them. Dr. Mwigulu responded that those with verified records have been paid and that any genuine outstanding claims would be addressed according to established procedures.
Richard Maboto inquired about the compensation for people in Nyatwali Ward who are being displaced. Dr. Mwigulu indicated that this matter is already under review, and they are working closely to address it along with other compensation-related issues in areas like Kipunguni in Dar es Salaam.
Hawa Mwaifunga questioned the government’s plan to pay former employees of the East African Community who worked in universities. Dr. Mwigulu stated that those with verified claims would be paid, and the government would continue to make payments as funds become available.
Emmanuel Mwakasaka asked about the government’s plan to ensure timely pension payments to retirees.
Dr. Mwigulu detailed the establishment of the Treasury Pension Payment System (TPPS), which helps ensure retirees receive their benefits promptly. The system includes scanning and storing all retiree files for quick access and response at regional Treasury offices. The government is also educating the public on retirement benefits to ensure retirees understand the appropriate pension funds and the types of benefits they are entitled to.
In additional questions, Mwakasaka highlighted the ongoing issues retirees face in claiming their rights, with some dying before receiving their benefits. He asked about the government’s plans to improve the system to ensure timely payments. Dr. Mwigulu reiterated that the implementation of the TPPS aims to reduce bureaucracy and that measures are in place to ensure timely processing.
Regarding employer non-compliance with submitting retirees’ contributions, Dr. Mwigulu mentioned that the responsible sector (Prime Minister’s Office, Labor, Youth, Employment, and Disability) has addressed the issue, and the government remains firm in its stance. He assured that the government will closely monitor the situation and take deliberate actions against intentional delays.
The parliamentary session underscored the persistent issues surrounding compensation and pension payments in Tanzania. The MPs’ questions highlighted the need for urgent government action. Dr. Mwigulu’s responses indicate ongoing efforts and plans to resolve these issues, but the session also revealed that there is much work still to be done to meet the needs and expectations of retirees and those displaced by development projects. The government’s commitment to reviewing and improving the pension system and compensation processes will be crucial in ensuring the welfare of its citizens.
