According to officials report the pension fund’s coverage is about 5.6 percent of the employed population.

The Social Security Fund of Rwanda (SSFR) is to penalise employers who have not cleared their workers’ social benefits.

Penalties include a fine of up to 36 percent of the arrears or size of the company property. The fine accumulates up to 36 percent depending the period of default.

The monthly interest rate of the total amount due is 3 percent. The defaulters are companies from both public and private sector.

The move is intended to ensure that the workers’ social benefits are honoured by the employer.

The SSFR Director of Pension and Benefits, Oswald Munyandekwe said that enforcement is necessary since most employers are reluctant to honour their workers’ contributions.

"Every worker’s contribution is deducted monthly by his employer but the not declared to the trust fund. This means that his account is not credited making him vulnerable in future,” he said.

 "Social security benefits are an employee’s right and contributions towards them mandatory for all salaried workers. Therefore as a public institution meant to protect workers, it is within our jurisdiction to enforce standards aimed at protecting workers,” Munyandekwe maintained.

Though it is dependent on the capital intensity of the company, the employer contributes 5 percent while the employee is deducted 3 percent from his salary. Social benefits constitute 8 percent of the total salary.

However, the Actuarial Consulting Group (ACG), a Singapore based company recommended that the contribution rates be increased to 5 percent for both employer and employee.

This is to ensure the long-term financial sustainability of Rwanda’s social security system.

The move comes at a time when the pension body is moving towards increasing on its national social security scheme. This follows information from the phase one actuarial valuation data shows that the coverage is very low.

The ACG actuarial report said that there were only 216,304 active contributors as of December 2007 out of 3.9 million workers. This meant that SSFR’s coverage was about 5.6 percent of the employed population.

Worse still, active contributors where defined as members who have made at least one quarter of contributions during a year. The informal sector was the least covered.

Therefore SSFR is positioning itself to increase coverage from the current 5 percent to 10 percent.

As the pension body prepares for a comprehensive reform to ensure its long-term sustainability, ACG suggested that new packages be introduced in the social security system.

For instance, apart from the current retirement contributions SSFR could also offer packages such as health, housing, maternity and education insurances, thus attracting a bigger number of contributors to the fund.

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