Ivory Coast, Rwanda exchange tips on pension fund management

An Ivorian delegation made up of officials from the West African country’s public pension body will work with their Rwandan counterparts to improve the Fund’s efficiency through the sharing of best practices. Eugène Niankan Konan, the deputy manager of Caisse Générale de Retraites des Agents de l’Etat (CGRAE), the head of the visiting delegation, said their visit to Rwanda aimed at studying how the local pension scheme operates so as to pick ideas that they can use to improve their own fund. Konan added that he was impressed by the structures of RSSB, mainly in terms of the collection and management of premiums. “These are the two resources generating activities for all the social security funds: contributions and resources generated starting from investment operations,” he said. Konan said the visit will provide an avenue for the two social security bodies to share experiences, especially since CGRAE carried out structural reforms in 2012 to improve their operations. “What brought us to a reform is that there had been a rupture in the pension scheme. We found ourselves with insufficient contributions to cover retirees’ pensions. And, as a result, the government had to support the social security fund for a long time to help pay out pensions,” he said. “If there were no reforms, obviously, the social security regime would ‘disappear’, which would cause social difficulties,” he added. Konan said, for the social security regime to work efficiently, there is a need for equilibrium between contributions and the paid benefits. He said before the reforms, the contribution rate was 18%, but it grew to 25% of the basic salary after the reforms. In ivory Coast, 33% of the premium is covered by the employee, while 67% is covered by the government. In case of Rwanda, Oswald Munyandekwe, the director of pensions and benefits of pre-retirees division at Rwanda Social Security Board (RSSB), said the social security scheme in the country has been gaining momentum, noting that it collected about Rwf60 billion in premiums last year and it targets to collect Rwf65 billion this year. He said the contributions were about Rwf20 billion 10 years ago, with about 4,000 active employers. So far, the social security board covers about 16,000 active employers and 460,000 employees contributing to the pension scheme. Currently in Rwanda, the contribution rate is 6% of the gross salary, whose payment is equally covered by the employer and the employee. RSSB makes long-term investments in various domains, including financial instruments such as bank deposits, stocks and bonds, and real estate. Munyandekwe noted that much as the social security fund was left in shambles by 1994 Genocide against the Tutsi, it has since gained momentum, thanks to the good political will of the Government of Rwanda that put in place mechanisms to revamp the fund. However, the pension body expressed concerns over the low affiliation level as only 10% of Rwandans subscribe to the pension scheme. “Comprehensive strategies are needed to ensure that all Rwandans understand the benefits of pension scheme. Under the government’s social security policy for all, instituted in 2009, every Rwandan is entitled to voluntary pension (social security),” Munyandekwe said. RSSB mandate covers pensions, health insurance, including the community based health insurance (CBHI), as well a maternity insurance, which it will manage once the maternity leave law gets published in the Official Gazette. RSSB has 30 branches at district level and 416 agencies in all the 416 sectors of the country. According to Innocent Nyirishema, the head of the contributions division at RSSB, they have embraced technology which enables them to communicate with employers efficiently, whereby an email or message can be sent to them indicating their due contributions. He also said the government’s Integrated Public Payroll Information System (IPPIS) has also helped the Ministry of Finance to pay not only the salaries (of public servants) but also the contributions through automatic declaration. editorial@newtimes.co.rw

News

Ivory Coast, Rwanda exchange tips on pension fund management