Mbowe: The new pension formula is unjust

CHADEMA · 2023-08-09T16:00:53+00:00

By CHADEMA Media MAGU, MWANZA. The National Chairman of the main political party - CHADEMA Mr Freeman Mbowe has promised that if his party succeeds in winning the 2025 Presidential election and coming into power, he will remove the current Pension Formula for retirees to ensure they receive their full entitlements and in a timely manner. He mentioned that the current Pension Formula has led many retirees in the country to live in poverty immediately after retiring from employment, and many of them end up depending on their relatives, unable to support their families. The new formula, which came into effect from July 1st, 2022, sees the retired workers pocketing a lump sum of 33 per cent of their total contributions and the remaining 67 being reserved for monthly pension payment. The new rates apply to both private and public sectors. "We will remove the current pension calculation for the retirees to ensure they receive their full payments and on time, enabling them to live a happy retirement life," said Mr Mbowe while addressing a rally in Magu District in Mwanza Region on Wednesday August 9, 2023. In June last year, the Minister of State in the Prime Minister’s Office (Labour, Youths and People with Disability) Prof Joyce Ndalichako clarified that under the previous arrangement, some of the pensioners were receiving higher lump sums than what they contributed, while others were receiving less compared to their contributions. "Some of the effects that were brought by the previous arrangements of the 50 per cent lump sum, there were some contributors pocketed 129m/- after contributing 36m/- in 467 months,” she said. “But there are others whose contributions were amounting to 86m/- in 350 months but ended up getting a lump sum of 54m/- under the arrangement of 25 per cent pension formula,” added the minister. She said this caused inequality among pensioners and that the just introduced flat rate aims at ending the differences. “This rate has put all pensioners in one arrangement that is guided by the Employment and Labour Law of Tanzania,” explained the minister, saying the new formula enables the pension funds to operate equally. Ends-

Thread starter CHADEMA
Start date Aug 9, 2023

CHADEMA

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Mbowe: The new pension formula is unjust

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