:: PPF Pensions Fund ::-

FAQ

When was PPF established and why?

PPF was established in July 1978 by an Act of Parliament no. 14 of the same year with a purpose of providing pensions and other social security benefits to its members.
What are the major functions of PPF?

The major functions of PPF are:
• Registering members
• Collecting and administering contributions
• Investing the contributions and
- Paying/offering benefits when due.
Being a Parastatal Pensions Fund does it mean that PPF provides social security coverage to members who are only from parastatal organizations?

No.The Fund covers employees from all sectors of the economy (parastatal, private firms, self employed, informal) and those on contracts. Initially it covered employees of parastatal organizations and those in private companies were registered but with the consent of the Minister for Finance. However, the legal provision requiring the Minister’s consent was removed giving the Fund mandate to widen up coverage to all employees including those on contracts following amendment of its Act (Parastatal Pensions (Amendment) Act, No. 25 of 2001) passed by the National Assembly in the year 2001.
What is the difference between PPF and other social security funds in Tanzania?

The difference between PPF and other social security funds is:
• Contributions rates are flexible
• Shorter qualifying period for old age benefits i.e. 120 months as compared to 180 for other funds.
• Unique benefits i.e. Education benefit.
How are member's contributions deducted and remitted to the Fund?

Each member is required to contribute 20% of the salary of which the employer contributes 10% or 15% while the employee contributes 10% or 5%.
Contributions are remitted monthly to PPF. The law has given the employer a grace period of 30 days after end of each month.
What happens if members’ contributions are not remitted after the grace period of 30 days?

According to the law, non remittance of members’ contributions by an employer is a criminal offence. A penalty of 5% is charged every month on delayed contributions.
Does the penalty affect the employee?

The penalty does not involve the employee. This is the employer’s responsibility only. However, if the penalty is out standing when the employee is due for payment of benefits that period is excluded in calculation of the benefit.
How do PPF members know their contributions’ status?

Contribution statements are sent to each member once a year. However, the same statements can be accessed through the PPF website i.e. www.ppftz.org
Where does PPF invest?

PPF has an investment policy that is made up of three main classes as follows:
a) Fixed Income Asset which includes: bank deposits; commercial papers; treasury bills; treasury bonds; corporate bonds; term loans; and promissory notes;

b) Equities which include shares in locally listed and non listed companies.

c) Properties which involves commercial and residential buildings.
What are the guiding principles of PPF’s investments?

TheThe guiding principles on investments are:

- Safety: The Fund invests in areas with minimum risk;
- Liquidity; A certain proportion of investments are held in assets that are easily convertible into cash;
- Yield: Resources are committed to high yielding investments; and
- Diversification: The Fund diversifies its investments for the purpose of spreading risks.
By following the above principles, the Fund ensures that the members’ contributions are hedged against inflation while maintaining optimum liquidity levels to meet current financial obligations. These principles also ensure capital preservation, growth and appreciation and the balanced portfolio helps to avoid strains in times of unforeseen contingencies
Why does the Fund invest in properties?

It It has been observed that investing in real estate is one of the safest and most viable areas of investments in the country.
How does the Fund involve members in investment decisions?

All investment decisions are made by the Board of Trustees which comprises representatives of employees (members), employers and government. Members and the Board of Trustees meet every year in which among others investments are discussed.
What benefits are offered to members?

PPF PPF operates two types of schemes, i.e., parastatal pensions scheme (Traditional scheme) and Deposit Administration scheme. Each scheme has different types of benefits to its members. Under the Traditional scheme PPF offers the following:
- Old age benefit
- Disability benefit
- Death benefit
- Survivors’ benefit
- Education benefit
- Gratuity benefit, and
- Withdrawal benefit
On the other hand, lump sum or lump sum with annuities is offered under Deposit Administration Scheme.
How do PPF benefits align with ILO Minimum Benefits Standards?

ILO Convention No. 102 of 1952 which is yet to be ratified in Tanzania prescribes 9 benefits which are old age, sickness, disability (invalidity), survivors, maternity, employment injury, unemployment, health care and subsidies for families with children. Of these, the basic benefits are old age, disability (invalidity) and survivors. PPF provides all the three basic benefits.
Do PPF members get interest on their contributions?

There is no interest under Traditional scheme which operates under defined benefits system.
Interest is offered on Members Contributions under the Deposit Administration scheme which operates under a system known as Defined Contribution.

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