THE RWANDA Social Security Board (RSSB) has said it will increase the monthly stipend paid to pensioners, raising the hope of thousands of senior citizens who currently get as little as Rwf5,200 ($6), which is not enough to afford them basic needs.
“I cannot go into specifics now but I can say that the pension benefits will be increased,” RSSB director-general Jonathan Gatera said recently. He was speaking on national television.
Mr Gatera said that although the revisions would be made across the board, they would not be uniform, with the lowest contributor getting a rise of as high as 200 per cent, while those who earn above Rwf1 million ($1,190) could see minimal changes of as little as 0.6 per cent.
Labour leaders welcomed the development. “This is really good news for us,” said Eric Nzabandora, the president of the Congress of Labour and Fraternity in Rwanda (COTRAF), a syndicate of workers’ trade unions.
“We cannot say what they are adding will be satisfactory compared with the needs of the people, but it is a move in the right direction,” he added.
The cost of living has been rising in the past 14 years, which has seen pensioners unable to afford basic goods from the minimum monthly stipend of Rwf 5,200 that was set in 2003.
RSSB currently collects Rwf59 billion ($70 million) in statutory pension contributions annually but only allocates Rwf16 billion ($19 million) to benefits.
Pensioners have often expressed their frustration about their savings being invested in loss-making ventures, while they struggle to survive.
The auditor-general has on several occasions, in his annual reports, criticised RSSB, accusing it of investing pensioners’ money in ventures that have not generated any returns. The most recent report says 16 equity investments that cost the body Rwf65 billion ($77 million), did not earn RSSB a single cent in the year ended June 30, 2015, but the pension body still injected Rwf16 billion more to three of the investments in question.
Among others, the body has come under fire for building office blocks in secondary towns — which made it difficult to get tenants.
“We have had serious issues with RSSB because of the money they have squandered on investments that didn’t make any returns. That money would have served pensioners well if it was given to them as benefits,” said Mr Nzabandora.
Records from RSSB show that as of December 2016, the body had an investment portfolio amounting to about Rwf640 billion ($762 million), spread across sectors such as real estate, telecommunications, energy, manufacturing, tourism and financial services.
“RSSB maintains a diversified portfolio, which shields it against uncertainty and risk that may affect any one segment of the sector in question,” the fund said in a recent statement to Rwanda Today. RSSB added that about 56 per cent of its investment portfolio is allocated to fixed-term investments, mostly in government securities.
Mr Nzabandora said that they were now looking forward to the 2017-18 budget, where they expect a statement on the new benefit rates.
“My guess is that the increments will be included in the next budget,” he said.
Workers have also been complaining about the government raising the retirement age from 55 to 60 years.