Understanding the causes of early withdrawal from retirement saving accounts in Tanzania: a case of National Social Security Fund (NSSF)

This study is concerned with establishing the causes of early withdrawal from retirement saving accounts. The specific objectives of the study were to identify the causes of early withdrawal and to determine members understanding of the impact of the early withdrawal. The study was conducted in NSSF Dar es salaam offices to include Kinondoni, Temeke, Ilala and Head office. About 100 respondents participated in the study. Research method that was used in this study is case study. In the study, the information was obtained through questionnaires that were distributed to the respondents in Kinondoni, Temeke, Ilala and Head office. The analysis has been done by the help of a Statistical Package for Social Sciences (SPSS). The study revealed that, early withdrawal is associated with a number of life changing circumstances. A need for housing, capital, job loss, on set of poor health and education needs (higher education mostly) compel members to make early withdrawal. These findings bring to light the fact that early withdrawal needs to be controlled or even put to an end. But unless an alternative source of income to accommodate these other life changing circumstances is established, then it is difficulty and questionable if it is right to eliminate or discourage early withdrawal. To regulate members’ early withdrawal behaviour, the study recommends the introduction of unemployment benefit for members who experience job loss, provision of affordable loans to members, the introduction of integrated saving policy and the improvement of benefit and services provided by the social security institutions