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RSSB business good for at least 40 years

Wednesday April 11 2018
Sonarwa

Sonarwa offices in Kigali. The country’s oldest insurer, has in the past been linked with corruption and poor service. PHOTO | CYRIL NDEGEYA | NATION

By MOSES K. GAHIGI

The Rwanda Social Security Board has affirmed that the body is well cushioned and sustainable for the next 40 years, amid concerns of low contributor numbers and bad investments.

RSSB has previously been accused of misusing funds, investing in loss-making ventures and offering inadequate benefits.

“The fund is sustainable for the next 40 years, while investments in property only account for 10 per cent of our ventures and they are long term,” said Jonathan Gatera, the director-general of RSSB.

He said the body has also invested in the money market and diversified its ventures.

“Our main focus now is to get more people to contribute to the fund,” he said.

Data from RSSB shows that of the total 448,818 pension contributors, those between 50 and 54 years, account for only 4.4 per cent of total members.  
Contributors aged between 25 and 29 years account for 24.5 per cent while those between 30 and 34 years account for 23.1 per cent.

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The average age of Rwanda’s pension contributors is 35 years, which shows the country has a relatively younger workforce who will contribute to the pension fund for a much longer time compared with neighbouring countries.

Despite this, RSSB still struggles with enrolling more people into the pensions brakcet, especially those in the private sector and in the informal sector. Those in formal employment only account for 10 per cent, with the vast majority employed in the informal sector.

Government employees remain the biggest contributors to the fund, which analysts say is not sustainable.

RSSB recently increased benefits for pensioners, with those who were getting between Rwf 5,200 ($6) and Rwf10,000 ($11) per month now set to get up to 150 per cent increment. This new structure only awaits to be publicly gazetted.

By December 2016, RSSB had an investment portfolio worth up to Rwf640 billion ($748.8 million), with a 15 to 20 per cent year-on-year growth. The pension fund has investments real estate, local and foreign equities, treasury bonds and Bills, current accounts, corporate bonds, mortgages and bank deposits.
Industry analysts say RSSB needs to formulate innovative management structures to capture employees in the informal sector. They could do this by using mobile money services to collect contributions.

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