PSD says to strive for matching pension with cost of living

As part of its manifesto, the Social Democratic Party (PSD) says it will advocate for timely matching pension with the cost of living so that retirees enjoy improved living conditions, if its candidates win seats in Parliament’s Chamber of Deputies. It talked about the pledge on July 5 at a campaign rally in Gasabo District, Kigali as it sought to garner votes for its 59 parliamentary candidates and for the re-election of incumbent Paul Kagame in the July 14-16 elections. Kagame is the flag-bearer of the ruling Rwanda Patriotic Front (RPF-Inkotanyi) and its candidate for the July polls, in a coalition with eight other political organisations, including PSD which endorsed him for presidency. ALSO READ: PSD pushes for tax exemption for people earning Rwf100,000 a month Clement Musangabatware, a member of PSD, said that the party wants all Rwandans to enjoy welfare, have purchasing power, or be able to buy goods and services they need without being overwhelmed by prices on the market. While the Rwandan franc lost value over the past years which caused its purchasing power to decline, he said that there are various circumstances that contributed to an increase in the cost of living through weakening the value of the [Rwandan] franc, citing the Covid-19 pandemic, wars in different countries including Ukraine, among others. He pointed out that in case prices have increased on the market over a given period, fair adjustments should be made so that a person (retiree) who served the country lives a dignified retirement. Therefore, we want that retirees have dignity, and means to make purchases to be able to provide for their families,” he said. “It would be sad if you made savings, but you are unable to provide for your family because such money which had [higher] value then, such money lost purchasing power because of economic changes. It is in that context that PSD wants that pension be adjusted based on market realities, he observed. On how to make that a reality at the same time ensuring the sustainability of the pension scheme, he said that the institution in charge of pension plan administration – which is Rwanda Social Security Board – makes investments and can use the profits to increase pension without compromising the sustainability of the scheme. He added that an entity in charge of taking care of retirees should be happy when they lead decent lives as people who served their country and saved money with it as its custodian. PSD’s proposal responds to pensioners’ appeal to match social security with the cost of living to address situations such as when retirees’ welfare deteriorates due to increases in prices at the market, and franc depreciation. On April 1, the president of Rwanda Pensioners’ Association, Dorothée Uwimana, told The New Times some retirees get as small as Rwf20,000 in pension benefits – with Rwf13,000 as the smallest pension – per month, which she said was too little to help a pensioner meet their basic needs given the rise in prices at the market. The law governing the organisation of pension schemes in Rwanda, which was enacted in 2015, provides that a public entity in charge of a pension scheme shall carry out an actuarial study for the pension scheme at least once every five years. An actuarial study is a type of evaluation of a pension fund’s assets versus liabilities to determine the funded status of a pension plan, risk management, and governance, for sustainability purposes. The law stipulates that based on the findings of the actuarial study, pension benefits may be increased; and where the actuarial study shows a possible negative impact on the economy, the number of contributions shall be increased based on legal provisions. The latest pension benefits increase was made in 2018. It resulted in raising the minimum monthly pension from Rwf5,200 to Rwf13,000, according to RSSB. Though RSSB said that an actuarial study was done in 2022, neither its results nor decision to increase pension have been made public.

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PSD says to strive for matching pension with cost of living