Pensioners seek representation on RSSB board

Pensioners have petitioned the government seeking to have a seat on the Board of Directors of Rwanda Social Security Board (RSSB). Through their umbrella, the Rwanda Pensioners’ Association (ARR), the pensioners aver that being on the board will enable better advocacy for their members. In an interview with The New Times, on Monday, Modest Munyuzangabo, the president of ARR, said the association had written to the Ministry of Finance and Economic Planning requesting that their plea to have representation on the board be put into consideration. He wondered why other parties, including workers, were represented on the board yet pensioners are not, despite being among the major stakeholders of the social security board. “If we were represented on the RSSB board, we would make our own contribution instead of accepting whatever RSSB decides,” Munyuzangabo said, citing RSSB’s upcountry buildings which lack tenants. “Of course, it is building the country and carrying out investments, but you understand that in this case we lost, yet there are other priorities. We would exchange ideas about the management of our savings,” Munyuzangabo said. The new pension law, enacted this year, stipulates that studies should be carried out every five years on pension benefits based on the cost of living. ARR argues that the actuarial studies should be decided jointly by RSSB and pensioners’ representation on the board. “We can, together, determine how much money should be increased to the pension benefits based on the state of the pension scheme. Otherwise, they tell us about the pension benefits and pensioners do not accept it because we are not involved in the pension evaluation process,” he said. Munyuzangabo said their association does not understand why pension benefits are not adjusted regularlt in line with the cost of living. “For instance, in Europe, pension benefits are increased every two years. In the West Africa, when employees’ salaries go up, pension benefits also increase, which is not the case here,” he said. ‘The law decides the board’ However, RSSB chief executive Jonathan Gatera said having pensioners represented on the RSSB board was not necessary. He cited law no 45/2010 of 14/12/2010 establishing RSSB and determining its mission, organisation and functioning under which board members are appointed by a Presidential Order on the basis of their competence and expertise. “The law is clear and RSSB management cannot do anything about the pensioners’ wishes,” Gatera said. “Moreover, imagine a situation whereby all beneficiaries of different RSSB schemes such as the pension scheme and Mutuelles de Sante (community-based health insurance scheme) were represented on the board. In my view, this kind of board cannot work.” Meanwhile, Gatera said they were working on the pensioners’ wishes to have pension benefits increased. “There is hope of reaching an understanding soon so that benefits can be increased on the one hand, and ensuring financial sustainability in the future, on the other,” he said. A 2013 report by Government Actuary’s Department (GAD) recommended that the contribution to social security increase to at least 10 per cent of the employee’s salary, up from the current 6 per cent, if pension benefits are to increase and for the pension scheme to be sustainable. GAD, the UK-based firm, uses statistical data to provide actuarial review and advice for social security and insurance schemes arrangements. It was contracted to conduct the study in response to growing calls for increased benefits among pensioners. The report placed present value of the projected expenditure in respect of accrued benefits over 50-year period at an estimated Rwf1,279.7 billion compared to assets of the scheme, which were valued at Rwf301.6 billion, and recommended that funding from employees, employers and the government is required for the viability of the pension scheme. The latest pension increment in Rwanda was affected in 2002, when the 30 per cent increment (highest) was made for pensions and annuities below Rwf5,200, while an increment of (lowest) 5 per cent was made for pensions and annuities above Rwf200,000. However, ARR argues that there are still pensioners getting Rwf5,200 monthly benefits yet their purchasing power has considerably decreased due to the current high cost of living. A kilogramme of beans, for example, which cost Rwf31 in 1980, now costs Rwf500. editorial@newtimes.co.rw

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Pensioners seek representation on RSSB board