Nadhani ni ile hint y Mwanakijiji ya juzi. Soma zaidi Alarm over payment deals at pension fund Thursday, 31 March 2011 23:57 By Frank Kimboy, The Citizen Reporter Dar es Salaam. A parliamentary committee has directed the Controller and Auditor General (CAG) and the Treasury to review agreements of all contractual employees in public organisations to ensure they dont pocket unrealistic benefits upon expiry of their terms. The directive came after the Public Organisations Account Committee (POAC) smembers were informed that the Parastatal Pensions Fund (PPF) in 2009 paid three workers a total package of Sh1.2 billion in response to contracts which they had entered with the Fund. This was revealed by the PPF director general, Mr William Erio, when presenting PPFs 2009 performance statement. Mr Erio told the committee that PPF will this year pay about Sh300 million as further group endowment allowances and as gratitude allowances to three directors whose contracts would have expired.Mr Erio also told POAC that in 2009 PPF paid Sh1.2 billion as group endowment fund and as gratitude allowances to several contractual employees. However, some of those who were paid the allowances were rehired under a contractual basis and continued in their capacities, Mr Erio told POAC members. He told the committee that according to the Pension Funds Act, all directors should be employed on a five-year contractual term. Issuing the directive, POAC chairperson Zitto Kabwe (Kigoma North-Chadema) said the CAG and the Treasury should start investigations on pension funds, where the problem has been detected, before moving to other public organisations. Mr Kabwe said CAG has also been instructed to scrutinise those who have benefited from the system for the past five years to see if the laws were adhered to when contracting them.Once an agreement with a contractual employee comes to an end he or she is supposed to be paid gratitude allowance for his services to the organisation and leave employment. How come the same person is involved in the group endowment scheme? Mr Kabwe wondered. Earlier, Mr Erio told POAC that PPF has been paying between Sh132 million to Sh220 million as endowment and gratitude allowance to directors whose contracts expire. Commenting on the decision, a member of the committee Kangi Lugola (Mwibara - CCM) said it was hard to believe that there were some people who were pocketing millions of tax payers money in pretence that they have retired only to go back to their offices. You cannot fetch more than Sh200 million as your retirement benefit after every five years only to go back to your office. This cannot be tolerated, he warned. Mr Kabwe said CAG should also review the contracts in line with a circular issued on December 2009 by the Public Services Management ministry. The circular, according to Mr Kabwe, requires all the managements of public organisations to make sure that all contractual employments are not renewed upon their expiry, unless the said employee opts to be employed permanently. The committee also directed PPF Board of Trustees vice chairman, Dr Kassim Kapalata, to write to the minister of Finance asking him to remove Ms Rosemary Kirigini from the board as the law doesnt allow an MP to serve on it. Parliament passed a law that prohibits any MP from serving as a member of the board of directors or trustees in any financial institution. I wonder why Ms Kirigini is still on the board You should bring your report on this matter during our next meeting, he directed. The committee also ordered PPF to float a tender for other pension funds which would manage its group endowment scheme. He said it was not right for PPF to manage its own scheme.In his report, Mr Erio said by December 2009 the fund had grown by Sh125.5 billion compared to 2008 when the growth recorded was Sh499.3 billion. Mr Erio said currently PPF was paying between Sh50,000 to Sh6.2 million to each of the 20,000 retirees as monthly pension allowances. He added that in 2009 PPF used Sh47.19 billion as pension allowances to retirees. However, he said many PPF members have been complaining about the methods the fund has been using to calculate pensions. But the PPF director general added that currently the government was working hard to ensure that the method used to calculate pension allowances under PPF resembles the one used by PSPF and LAPF.