Africa-Press – Tanzania. THE National Assembly has been informed that the government has improved the pension formula, including increasing the minimum amount of monthly pension paid to retirees across the country.
Minister of State in the Prime Minister’s Office (Labour, Youths, Employment and People with Disabilities), Ridhiwani Kikwete, told the National Assembly yesterday that, as of January 2025, the government had raised the minimum monthly pension for retirees from 100,000/- to 150,000/-.
Mr Kikwete was responding to a question raised by Mbogwe CCM legislator Nicodemas Maganga, who had asked when the government would review the pension formula to improve the pensions for retirees.
Maganga cited the growing number of complaints from retirees regarding the insufficient pension amounts.
In his response, Mr Kikwete explained that the government had already made changes to the pension formula during the 2022/2023 financial year.
Further improvements were made in the 2024/2025 financial year, following recommendations made by House on the matter.
Minister Kikwete said that the government had also increased the lump-sum pension amount. The percentage for retirees receiving lumpsum pensions, calculated at a rate of 50 per cent before the merger of pension funds in 2018, had been raised from 33 per cent to 40 per cent.
Further improvements were made for retirees whose pensions were initially set at a rate of 25 per cent before the pension funds merger.
Now, this group will receive lumpsum pensions calculated at a rate of 35 per cent, up from the previous 33 per cent.
Mr Kikwete also said that the government had implemented a 2 per cent indexation to monthly pensions to adjust for inflation. Indexation is the process of adjusting income, prices, wages, or pensions to account for inflation over time.
The minister reiterated the government’s commitment to continuously improving pensions for retirees as circumstances allow.
He added that every three years, the government conducts an actuarial study on the pension funds to ensure their sustainability.
In supplementary questions, Abdallah Shangazi (CCM-Mlalo) and Sophia Mwakagenda (Chadema Special Seats) inquired about the possibility of further increasing the minimum monthly pension to help retirees cope with the rising cost of living.
In response, Mr Kikwete acknowledged that the current minimum pension amount is low, but said that the decision to increase the minimum pension to 150,000/- had been based on multiple factors, including the sustainability of the pension funds and the results of actuarial studies.
Timotheo Mnzava (CCMKorogwe Rural) raised concerns about retirees who had received small lump-sum pensions after their terminal benefits were calculated using the previous percentage rates.
In response, Mr Kikwete urged retirees with complaints to submit them to the government for further review.
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