Evaluation on performance of social security funds in Tanania: a comparison between NHIF and NSSF

The study was conducted on Evaluation on Performance of the Social Security Funds in Tanzania which is very important for the Social Security Funds' and the Economic development as a whole. The sustainability of the Funds is critically dependent upon the level of efficiency with which they are managed. This study was designed to evaluate performance of Social Security Funds in Tanzania. The study used both primary and secondary data with a comparative case study orientation. Published financial statements and other data materials were collected principally from ease Social Security Funds. In addition, interviews were also made with responsible managers and officials from planning & investment departments of the funds. The statistical results show that the funds in Tanzania significantly do not comply with asset allocation policies and their assets are biased towards government securities, real estates and fixed deposits. They also show that the levels of administrative costs for the funds were significantly higher. They also revealed that the returns on investments of the funds are not significantly from the yields of the risk free securities (i.e.treasury bills). Comparison of funds ROIS and other investment vehicles (e.g. Fixed deposits) reveal mixed results. Conclusively, the study identified inefficiencies in Social Security Funds and the government pressure and socio development objectives that impaired Independence of the funds administrators. The funds should institute ways of cost reduction strategies and outsourcing some of the facilities whenever possible and finally a transparent and credible mechanism is put in place for appointing and electing 'tripartite' boards.

Evaluation on Performance of Social Security Funds in Tanzania

Accumulated

Assets (A) '000' Administration fees (B) '000' Administrati on fees % of net Assets C=B/A Surplus D '000' Ex-admn fees - ROA Cumm admin fees ROA F=E+C Year 2003 3.51 351 .00 354.51 3 51 2004 33 1 , 1 70,627.04 4. 1 9 41 8 74 422 93 4.19 2005 5 98 598.37 604 36 5 98 2006 6.86 685 59 692.45 6 86 2007 , 366.00 8.00 300.38 808 39 8 00 2008 63 8.60 859 62 868 22 8.60