THE SOCIAL SECURITY SCHEMES (TOTALIZATION OF CONTRIBUTION PERIODS) GUIDELINES, 2013

Transcription

1 THE SOCIAL SECURITY SCHEMES (TOTALIZATION OF CONTRIBUTION PERIODS) GUIDELINES, 2013 (Made under Section 5 of the Social Security (Regulatory Authority) Act No.8 of 2008 ARRANGEMENT OF THE GUIDELINES PART I PRELIMINARY PROVISIONS 1. Short Title and Commencement. 2. Application. 3. Interpretation. 4. Objectives of the Guidelines. PART II CONDITIONS APPLICABLE FOR TOTALIZATION OF CONTRIBUTION PERIODS 5. Conditions applicable for totalization of social security contributions. PART III TREATMENT OF MEMBERSHIP REGISTRATION AND MOVEMENT WITHIN SECTORS 6. Treatment of membership registration and movement within sectors.

2 " TOTALIZATION, PART IV COMPUTATION AND PAYMENT OF BENEFITS 7. Right of Totalization of contribution period. 8. Application and payment of Benefit. 9. Determination and Calculation of applicable actual values. 10. Payment of applicable balances. MISCELLANEOUS PROVISIONS 11. Off-setting Balances between schemes. 12. Prohibition against revising lump sum payments. 13. Prohibition against previous paid lump sum. 14. Members employed after effective date. 15. Sanctions. 2

3 " PART PRELIMINARY PROVISIONS I 1. (i) These Guidelines may be cited as Social Security Schemes (Totalization of Contribution Periods)Guidelines, Short Title and commencement (ii)these Guidelines shall come into force on the date they are signed. 2. These Guidelines shall apply to all Schemes operating in Application Mainland Tanzania. 3. In these Guidelines unless the context otherwise requires: Interpretation "Act" means the Social Security (Regulatory Authority) Act, NO.8 of "Actuary" means a person trained to understand risks and the probabilities and to apply such skills to the financial problems especially those involving uncertain future events such as human mortality and mobility and is a member of an institute, society or association of actuaries approved by the Authority; "Actuarial Report" means a report prepared by an actuary who undertakes actuarial valuations under the Act; "Actuarial Valuation" has the meaning ascribed to it in the Act; "Applicable pensionable salary or wage" means the salary or wage of a member determined for the purposes of benefit calculations as provided in the scheme laws and guided by the Authority; "Authority" has the meaning ascribed to it in the Act; "Corresponding scheme" means the scheme forming part of the benefit liability of a member as a result of totalization of contribution periods; 3

4 "Current scheme" means the scheme in which a member is registered and in which last contributions prior to retirement are made; "Financial Matters" has the meaning ascribed to it in the Act; "Salary" has the meaning ascribed to it in the Schemes Laws; "Social security benefit right" means the right given to a member of a scheme stemming from benefits such as pensions in the form of old age pension, survivorship pension; disability pension and other benefits, "Social security scheme" has the meaning ascribed to it in the Act; "Previous scheme" means any scheme which a member has previously contributed to, and forms part of the corresponding schemes; "Paying scheme" means a scheme with higher liability in the totalization of contribution periods, or which has the responsibility of ensuring a member is receiving benefits; "Totalization of contribution periods" means adding up of the number of months which a member has fully contributed for the purpose of getting similar social security benefits from different schemes due to change of employment for the purpose of creating qualifying condition for pension benefits, enhancing or improving pension amounts; "Transferability of social security benefits" means the ability of a member of a scheme to preserve, maintain, and transfer acquired social security benefit rights in the process of transferring from one scheme to another in lieu of protecting individual member of the scheme against losses which may occur during such transfer; "Trustees" has the meaning ascribed to it in the Act; and "Vesting period" means period of time required in achieving full benefit rights or privileges in a scheme. 4

5 4. (i) The general objective of these Guidelines is to provide Objectives of guidance on how to treat members of different schemes the Guidelines who have been subjected to membership of more than one scheme due to changes in the terms and conditions of employment. (ii) The specific objectives of the guideline include: (a) establishing conditions which give benefit rights to a member to add contribution periods completed under more than one scheme in order to increase pension credits of such a member to qualify for pension or improve the pension amounts', (b) safeguarding the interests of members by protecting their benefit rights acquired through different employment statuses in more than one scheme. 5

6 PART II CONDITIONS APPLICABLE FOR TOTALIZATION OF CONTRIBUTION PERIODS 5. The following conditions shall be applicable for Totalization of contribution periods: (i) The member must not have received a pension or a lumpsum benefit payment from any of the current or previous scheme, corresponding to the periods of contributions in that scheme which are required to be totalized. Conditions applicable for totalization of contribution periods (ii) The period of contributions of the member under the paying scheme which are to be added shall not be less than one month. (iii) Totalization of contribution periods shall be made for a member who qualifies for retirement by age or special condition specified under Sub-guideline (vi) and have made contributions to more than one social security scheme upon application by such a member to the current contributing scheme. (iv) Contribution periods shall not be added for the purposes of a member claiming early retirement, provided that such early retirement is not on special condition which makes such member to automatically qualify for pension. (v) Special conditions referred to under Sub-guideline (v) shall include retirement on medical grounds, retrenchment while a member is at the retirement age brackets, death of a member and disability. (vi)annual pensionable emoluments shall be determined at the end of employment of the individual applying the totalization rights. (vii) Annual pensionable emolument for the purposes of calculating the pension amounts referred to under Subguideline (vii) shall be determined by the current scheme. 6

7 PART III TREATMENT OF MEMBERSHIP REGISTRATION AND MOVEMENT WITHIN SECTORS 6. Every member in employment before the effective date of these Guidelines and whose periods of contributions are under more than one scheme, has the right to add up the periods of contributions at the time of their effective date of retirement or termination from employment. Treatment of membership registration and movement within sectors 7

8 PART IV TOTALIZATION, COMPUTATION AND PAYMENT OF BENEFITS 7. Any member, who is within the last five years of his compulsory retirement and has contributed to more than one scheme shall have the right to add up periods of contributions under each scheme as if all contributions were made under the paying scheme. Right for Totalization of contribution Periods 8. (i) A member who wishes to exercise totalization right shall make application in writing under the current scheme where the last contributions are made copying the same to all schemes where contributions were made and to the Authority. (ii) In computing benefit liabilities among schemes for totalization purposes, the benefit formula of each corresponding scheme shall be used in respect of the contribution period to that scheme. (iii) The liability that will be established upon computation under Sub-guideline (ii) shall be shared on prorate basis by all schemes where the contributions were made. (iv) The annual pensionable emoluments applicable to all corresponding schemes shall be as determined under Guideline 5 (viii). (v) A member who has exercised the totalization principle shall be paid benefits as computed in Sub-guideline (ii) under the scheme where he has the higher liability of benefit, and in case where all schemes have equal share on the benefit liability, the current scheme shall be the paying scheme. Application and payment of Benefit 9. The actual value to be payable shall be calculated and be determined as follows: (i) The applicable annual pensionable emoluments at the time of making the payment of benefits by the corresponding scheme is provided under Sub-guideline (viii). Determination and Calculation of actual values 8

9 (ii)the actual payment of the benefits shall be determined at the point of payment by the paying scheme. 10. The amount established under Guideline 9 shall be forwarded to the paying scheme by the corresponding scheme or schemes on or before the date the pension is due to be received under the paying scheme. Payment of applicable balances 9

10 PART V MISCELLANEOUS PROVISIONS 11. Schemes may enter into agreements for off-setting financial liability arising between them as a result of exercising the principle of totalization of contribution periods under these Guidelines and such agreements shall be valid provided that they are not at the detriment of member's right to access benefits at the right time and efficiently. Off-setting Balances between schemes 12. Any repayment of lump sum benefit to a scheme for the purpose of regaining the pension benefit rights lost due to such payment shall amount to fraud and shall be punishable under any law for the time being in force. Prohibition against Revising lump sum payments 13. It is prohibited for any scheme to receive repayment of a lump-sum payment previously paid to enable the member to add, for purposes of calculating pension. In the case where there is enough evidence to prove such event that scheme shall be liable and shall pay fine of not less than the amount which the other scheme would have to pay the member, at that same payment. Prohibition against previous paid lump sum 14. These guidelines shall not be applicable to a member who becomes employed after the effective date of these Guidelines. Members employed after effective date 10

11 15. (1) Any person who contravenes the provisrons of Sanctions these Guidelines shall be liable to pay a fine of not less than ten million Tanzania Shillings. (2) Notwithstanding the penalty imposed under Subguideline (1), the Authority shall have the powers to- (a) direct the corresponding scheme(s) comply with the requirements of these Guidelines, and (b) take any other measure it considers appropriate....?j.<??..r~{3. Irene C. Isaka Director General Date 11