Current pension rates are extremely low and do not
meet the intended goals of pensioners, namely, to enable a retiree to
sustain an acceptable standard of living.
The ordinances that have been put in place in an effort to improve the
situation are outdated in view of the changing circumstances and
Pensioners Union of Tanzania (PUT) says in its study report that the
economic and social changes worldwide and particularly in
have eroded the perceived benefits under the Ordinance.
The advent of trade liberalisation, the emerging free market, inflation
and currency instability have negatively impacted on the benefit of
That the ordinance remained operative for such a long time is a matter
However, the repeal of the ordinance and enactment of new legislations
in 1999 came as a relief to public servants and to political leaders as
But, it is unclear why these legislations excluded the pre - 1999
The plight of the retirees is further exacerbated by the rapid changes
in the social political and economic environment, PUT says in its
The traditional security has been eroded by the disintegration of the
The young are moving from rural to urban areas in search of salaried
jobs, while those in domicile in urban centres move to other centres
where opportunities are better.
In fact the urban life epitomises the disintegration of the traditional
Additionally, the incidence of HIV/AIDS pandemic has impacted negatively
on the elderly persons. The disease is prevalent in the young to middle
age group who are the real backbone of the community.
This group, PUT notes, is the workforce and the bread earners. With the
weakening and eventual casuality of this group, orphans are on the
increase and relying more and more on the elderly (grand parents) whose
ability to earn income is either limited or non-existent.
In the case of retirees whose incomes are meagre, the situation is
The rising cost of living fuelled by inflation and the decline in value
shilling has a telling impact on the retirees.
With the income of 20,000/= per month, the family of a retiree cannot
live comfortable for one week.
This situation is further compounded by the factors sited above i.e.
disintegration of family values and increasing number of survivors of
It`s against this background that PUT decided to carry out a study to
establish how best retirees welfare could be improved.
PUT is an NGO whose broad mission is to sensitize the society on the
status of the elderly particularly retirees from the public and private
sectors, provide platform for them to share experiences and advocate
The study, aimed at providing a road map for the betterment of the
benefits of the retirees, focused on the plight of retired civil
servants particularly those who fall under the Pension Ordinance of
Old age with its attendant physical and social changes unleashes broad
based decline in wellbeing of many elderly people.
PUT is concerned that these age--induced changes, such as decline in
bodily wellbeing, material wellbeing, freedom of choice, security and
social wellbeing, can quickly lead to destitution if no mitigation
measures are taken.
The pre-1999 pensioners fall in the category of social groups that are
highly vulnerable and therefore there is a need to articulate their
status and suggest measures that could be taken to minimize their
In the colonial era families used to provide the traditional social
security system world wide. A family was closely knit unit, which
catered for all members, young and old according to needs of the age
In old age, the young and the able bodied members of the family ensured
that the elderly needs were met in a manner commensurate with the
resources and economic status of the community.
There were no destitutes in any meaningful way. At the beginning of the
industrial revolution, during the 18th century, the business and
industry landscape were dominated by family and owner-run entities.
Under these circumstances the social security system continued to be
more or less the same as before the industrial revolution.
However, during the 19th century, industry and trade developed rapidly,
professional management emerged, and skilled workers were in demand for
various specialized tasks in commerce and industry.
The family dominated businesses declined and the values associated with
such business disappeared. Skilled workers of diverse origins replaced
As the nature of society changed the employer (owner) and workers
(employees) forged new relationships.
Increasingly the relationship between employer and employees became
negotiable. That skilled and experienced workers cannot be created
overnight became evident.
This self-evident fact prompted employers to retain workers for a long
time in order to promote productivity. Retaining workers entailed
provision of incentives.
Gradually social security schemes to cater for welfare of retirees after
long service with the employer came into existence either voluntarily or
through trade union pressure.
Workers social security systems introduced in colonies were modelled on
the schemes obtaining in the home countries of the colonial powers. It
was such schemes that were extended to
by the British colonial power.
The first welfare scheme for workers was introduced in 1924 in the form
of the Master Native Servants Ordinance of 1924. It provided for
rudimentary forms of workers welfare and protection mainly for
The PUT report says political and labour unions driven legislations were
introduced in the 1950s. The Employment Ordinance of 1955 covered the
private sector workers. The Pension Ordinance of 1954 was introduced for
the government workers.
This Ordinance was an improvement of earlier legislation, the Pensioners
Ordinance of 1932. The low ranking non-pensionable government workers
were catered for by the government employees` provident fund of 1942.
While the pension scheme was non-contributory the provident fund scheme
The government of independent
inherited the form and style of the welfare schemes, which were left
behind by the colonial power, namely non-contributory pension scheme and
contributory provident fund.
The provident funds were run by individual enterprises in the private
sector save for the Government employees.
The Government of Tanzania, conscious of the needs of the times,
introduced a structured and formal social security system in 1964 and
enacted the National Provident Fund Act of 1964 which was superior to
previous schemes and offered better benefits the report expounds.
A new era had truly begun. Several acts followed aimed at improving the
benefits of the workers in the public sectors namely the Parastatal
Pension Fund launched in 1978 and Unified Teachers Services (UTS)
While the PPF was contributory UTS was not contributory. The 1990\'s
ushered in an era of radical departure in the structure and style of
social security schemes in an era of radical departure in the structure
and style of social security schemes but they remained sectoral,
occupationally-oriented and were based on employee-employer
The main schemes are the NSSF, PPF, LAPF, Teachers Service Commission
and PSPF. Each successive scheme aimed at betterment of the benefits of
the beneficiaries in recognition of the imperative of the times.
Most of the civil servants who served under the first phase through to
the first term of the third phase government of the CCM Government were
covered by the Pensions Ordinance, 1954.
The current retirees whose benefits fall under this ordinance served
during that period.
The pension scheme was non-contributory. It also provided for retirement
at 50 and 55 years for voluntary and compulsory retirement respectively.
The ordinance provided a formula for the calculation of pension
benefits. Survivors\' benefits were also acknowledged.
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