As a result, Social Security Regulatory Authority (SSRA) has been inundated with funds to inspect and that it will now audit all real estate investments made by pension funds due to a recent scandal involving NSSF Fund.
SSRA director general, Irene Isaka, told The Guardian during the week that the special inspection will cover all five major pensions’ funds in the country, namely National Social Security Fund (NSSF), PPF Pensions Fund, Public Service Pension Fund (PSPF), LAPF Pensions Fund, and GEPF Retirement Benefits Fund.
"The main objective is to establish the extent to which these funds are complying with prudent investment management practices aimed at protecting members’ interests, grow assets of the funds, and ensure sustainability of the schemes," Isaka said.
"The inspection has been concluded in some (funds) and is still ongoing for others in line with our annual inspection plans," she added.
The SSRA DG further noted that the inspection started with NSSF - the country's biggest pensions’ fund - and revealed that the scrutiny of the fund's real estate investments raised red flags, prompting SSRA to report the matter to the fund's board of trustees.
"For undeveloped plots, we looked at the acquisition price to establish if it is according to the market, and we also checked whether the relevant title deeds were in place," she explained.
Just two weeks ago, the NSSF board of trustees suspended 12 high-level executives of the fund pending a formal investigation into allegations of big-time funds embezzlement and abuse of office in the course of several transactions, including real estate investments.
Reports say NSSF’s fate will likely face more senior management officials and board members of the remaining Funds some of which have already been a subject of controversy in the past.
As far back as 2013, UK based Construction Sector Transparency Initiative has questioned cost of PSPF’s 25 floors Golden Jubilee Towers in Dar es Salaam. Golden Jubilee was one of the buildings which was earmarked for a voluntary audit by COSTI in 2010 and PSPF management had agreed to the exercise only to pullout later.
COSTI Tanzania Chapter then referred the matter to Public Procurement Regulatory Authority (PPRA) which is did the audit and established that the 130bn/- bill was too high.
In a report published by CoST in 2011, it was established that public procurement entities in the country were unwilling to disclose important information related to costs of projects, tendering processes and withholding evaluation reports by engineers.
“The PSPF project pulled out of the audit at the eleventh hour,” the COST report stated. Ironically, PSPF awarded the same contractor, Estim Contractors Limited of Dar es Salaam which undertook the Golden Towers project to do another gigantic, PSPF Commercial Towers project also in Dar es Salaam.
Last year, Social Security Regulatory Authority questioned LAPF’s costs relating to construction of Millennium Towers Phase II project and renovation of a 60 room Millennium Towers hotel which started in 2009/10 and was only completed last year.
LAPF management renovated the 60 rooms Millennium Towers hotel building and the 30 floor tower at US$ 35 million denying the fund US$55,000 per month in rent while another US$1 million was lost in unpaid rent to a South Africa company, African Sky Hotels Limited between 2000/5.
In a single colossal loss was the payment of $268,839 made to African Focus Tourism and Hospitality Consult of Dar es Salaam as storage charges for imported furniture and building materials from China although a contract signed between LAPF and Africa Focus as logistics managers of the project, gave the company storage responsibility.
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