This decision comes as part of efforts to enhance the welfare of pensioners in the face of rising market prices, with the changes set to take effect in January 2025.
A statement released by RSSB on January 24, 2025, outlined the key adjustments to the pension and work-related accident benefits, emphasizing a substantial increase aimed at improving financial security for retirees and beneficiaries.
One of the main changes involves an increase in the contribution rates for both employees and employers. Starting in January 2025, employees will contribute 6% of their income, up from the previous 3%, while employers will match the same amount. This brings the total contribution to 12%, an increase from the previous 6%.
Additionally, from January 2027 onward, the contribution rate will increase by 2% each year until it reaches 20% by 2030. This long-term adjustment is intended to sustain the growth of pension benefits in line with inflation and market conditions.
These changes aim to address the current inadequacy of pension payouts, which many have found insufficient in light of the increasing cost of living.
The recent adjustments are a direct response to this concern, ensuring that the benefits given to pensioners reflect the economic reality.
The new pension rates will bring significant increases in payments across various categories. For example, the basic pension and work-related accident benefit will rise from Frw13,000 to Frw33,710.
In addition to this, those who were receiving Frw20,000 will now receive Frw47,710; those who were receiving Frw50,000 will now get Frw92,710; those previously receiving Frw100,000 will now see an increase to Frw155,210; those who were receiving Frw 500,000 will now get Frw580,000; and those receiving Frw 1,000,000 will now receive Frw1,095,210 .
These increased amounts will apply to all beneficiaries who were enrolled in these categories before the decree was announced.
Understanding pension calculations
RSSB is responsible for administering pensions, which act as a substitute for income when workers can no longer earn due to aging, disability, or for the dependents of workers who pass away after contributing to the system.
A person is eligible for a retirement pension at age 60, provided they have contributed for at least 15 years. The pension amounts to 30% of their average monthly salary from the last five years of employment, with an additional 2% added every year of contribution.
In addition to the standard retirement pension, early retirement is available if an individual's health significantly declines, as confirmed by a medical professional. RSSB also provides disability pensions that are unrelated to work and survivor pensions for the dependents of deceased members.
For survivor pensions, a widow receives 50% of what the deceased member would have received, while a child with one surviving parent is entitled to 25%. An orphan, who has lost both parents, will receive 50%. If the deceased member had neither a spouse nor children, the pension is allocated to the parents, who will receive 25% of the monthly pension amount.
Individuals who fail to make the required 15 years of contributions are not eligible for a monthly pension but are entitled to a one-time payment upon reaching the age of 60.
Currently, over 60,000 people in Rwanda are receiving monthly pensions, according to RSSB.
This increase in pension benefits reflects Rwanda's commitment to improving the financial security of its retirees and ensuring that those who have contributed to the country's development are supported in their later years.
IGIHE
Source : https://en.igihe.com/news/article/rwanda-increases-minimum-pension-benefits
