South Sudan risks a crisis that could cripple the payment of pensions due to the failure of state governments to submit nominal deductions.
The South Sudan Pension Fund said the ministry of finance and planning has in the past remitted less amount than expected, a 2.9 per cent rather than 16 per cent to the fund.
“The reason [for low remittance is] unclear whether it is due to the calculation that goes wrong, or the method that goes wrong. Do they perform nominal calculations?” questioned Jacob Mayendit, South Sudan’s Pension Fund General Manager while being interviewed by The City Review.
He said this has impacted the South Sudan Pension Fund’s ability to collect contributions.
Mayendit explained that the “Ministry of Finance is supposed to do a calculation of 16 per cent, which is 11 per cent share of employee’s contribution and 5 percent of the individual’s reduction.” But this is not happening.
“The states are not even remitting, [they] are getting contributions and the politicians are misusing that fund.”
Mayendit demanded that the contributions be subtracted immediately from Juba and only salaries be sent to the states because any pension that goes to the states does not return to the retirement savings fund’s block account.
South Sudan is divided into 10 states and three administrative regions. According to Mayendit, only a few of the states contribute to the pension fund.
“We have few states that have responded, we have Warrap State that contributed, they have never stopped since the first independence of South Sudan,” he said. He however urged Warrap to up the contribution from five per cent to 16.
The others are Jonglei, and Eastern Equatoria States, as well as the Pibor Administrative Area that have recently joined in contributing pension fees.
He revealed that states such as Central Equatoria stopped contributing by last year, claiming that they were going to establish their own pension fund, which according to Mayendit is not legally correct.
“Western Equatoria, Lakes, Unity, Upper Nile State, and Western Bahr el Ghazal have never responded completely,” he said.
“States such as Western Equatoria say they are going to utilise the money for reasons they know better, while Unity and Lakes State say they will retire their own people and pay them, nevertheless I’m not sure how?”
Mayendit urged the ministry of finance to instead avoid channeling the money to the states and administrative areas which, according to him, will not be accounted for.
“I am urging the ministry to do both calculations for the MDAs and the states and the three administrative areas to be deducted together and sent in to the block account at once at those calculations of 16 percent but not 2.9 percent.”
He argued that the fund faces a challenge when the Ministry of Finance remits contributions given that it only has three columns such as salary, pension contribution, and PTI.
“In some occasions, pension fund has been told that the salary has been released but the pension has not been released, the ministry should check how its payments is being done,” he said.
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