National Social Security Fund (Tanzania) Guide: How it Works and What it Offers

The National Social Security Fund (NSSF) in Tanzania is a vital institution that provides financial security to its citizens. It's mandatory for all Tanzanian employers to contribute to the NSSF on behalf of their employees.

The NSSF was established in 1963 to provide social security benefits to workers. It's a government-run fund that aims to ensure that workers have a safety net in case of old age, disability, or death.

To be eligible, you must be a Tanzanian citizen working for an employer who is registered with the NSSF. Once you're registered, you'll start contributing a certain percentage of your salary to the fund.

The National Social Security Fund (NSSF) of Tanzania is a government-owned entity, making it one of the four social security funds in the country. The others are the Parastatal Pension Fund, the Public Service Pensions Fund, and the Local Authority Pension Fund.

These funds were previously limited to specific sectors of the workforce, but regulations were liberalized in the early 2000s allowing all funds to enroll employees from the formal and informal sector.

The NSSF is managed by a board of twelve members, not including the director general.

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The National Social Security Fund (NSSF) of Tanzania has a robust investment strategy that aims to secure the financial future of its members. The fund invests 75 percent of its total annual sources, with a focus on government securities, fixed deposits, corporate bonds, loans, equities, and real estate.

The majority of NSSF's investments are in loans and government securities, which generate a significant portion of the fund's income through interest collections. In recent years, the fund has also made significant investments in real estate, undertaking multi-billion shillings construction projects across the country.

Here's a breakdown of NSSF's investment portfolio as of 30 June 2011:

In addition to its investments, the NSSF also relies on contributions from employers and employees to fund its operations. Employers are required to contribute 10% of their employees' monthly wages, while employees contribute 10% themselves. Employers may also opt to contribute at a higher rate.

The National Social Security Fund (NSSF) of Tanzania has a diverse investment portfolio that includes government securities, fixed deposits, corporate bonds, loans, equities, and real estate. The fund traditionally invests in loans and government securities, with a large percentage of its income coming from interest collections.

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The NSSF's investment policy requires the fund to invest 75 percent of its total annual sources, which means that the remaining 25 percent is not invested. This policy has been in place since at least 2011.

The NSSF has invested heavily in real estate, undertaking multi-billion shillings construction projects in various parts of the country. In 2011, the fund's real estate investment was TSh 251,538 million, up from TSh 108,292 million in 2006/07.

Here's a breakdown of the NSSF's investment portfolio as at 30 June 2011:

Contributions to the National Social Security Fund (NSSF) are a crucial aspect of investing in your future. The contribution payable by the employer is twenty per centum (20%) of the employee’s monthly wages.

Employees contribute 10% of their monthly salary, which is a joint contribution with their employer. Employers also contribute 10%, but they may opt to contribute at a greater rate.

The total contribution rate is 20%, split evenly between the employer and employee. However, employers have the option to contribute at a higher rate, giving them more flexibility in their contributions.

Here's a breakdown of the contribution rates:

The employer's contribution is a joint effort with the employee's contribution, and it's essential to understand the different options available.

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The National Social Security Fund (NSSF) in Tanzania offers a range of benefits to its members, providing financial security and support in times of need. The Fund provides seven benefits, categorized as long-term and short-term benefits.

Retirement pension is one of the long-term benefits, which guarantees income security to elderly members by providing periodic payments upon attaining pensionable age. The compulsory pensionable age is 60, while the voluntary age is 55 to 59.

To be eligible for a retirement pension, a member must have contributed for at least 180 months and attained the age of 55 or above.

The benefit payable for retirement pension includes an initial lump sum payment, old age special lump sum, maximum pension, and minimum pension. The initial lump sum payment is equal to 25% of the calculated annual pension times 12.5, while the old age special lump sum is the total contribution plus interest.

Invalidity pension is another long-term benefit, which guarantees income security to a member who has permanently lost their earning capacity due to an accident or illness. To qualify for an invalidity pension, a member must be under pensionable age, suffering from permanent invalidity, and have made at least 180 contributions or at least 36 monthly contributions immediately before the preceding date of invalidity commenced.

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The benefits payable for invalidity pension are determined similarly to retirement pension benefits, with the minimum required credit being 36 months.

Survivors' pension is a benefit paid to dependents of a deceased NSSF member, aimed at compensating for the loss of economic support previously provided by the deceased. The pension payable shall be distributed as follows: 40% to the spouse and 60% to the children.

Here is a summary of the long-term benefits offered by the NSSF:

Short-term benefits offered by the NSSF include funeral grants, maternity benefits, unemployment benefits, and health insurance benefits.

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The National Social Security Fund (NSSF) in Tanzania offers its services to various categories of employers and employees.

The private sector is one of the main categories eligible for NSSF registration, which includes companies, non-governmental organizations, and religious organizations.

Registration with NSSF is compulsory for employers in the private sector, and it should be done as soon as the company is set up.

Employees in the private sector are also eligible for registration, provided they are between 18 and 60 years old.

Employees of international organizations operating in Mainland Tanzania, including foreigners, are also eligible for registration.

Self-employed individuals can also register with the NSSF scheme.

The Minister has the authority to specify any other category of persons eligible for registration with the NSSF scheme.

Here are the categories of employers and employees eligible for NSSF registration: