Compliance with Registration and Contribution Requirements of the Social Security Legislation in Sierra Leone 2002 - 2006

Type Thesis or Dissertation - Master thesis
Title Compliance with Registration and Contribution Requirements of the Social Security Legislation in Sierra Leone 2002 - 2006
Author(s)
Publication (Day/Month/Year) 2007
URL http://arno.unimaas.nl/show.cgi?fid=11511
Abstract
Social protection systems are delivered all over the world in a combination of pension schemes which could be a mixture of contributory and tax-financed, earnings related and flat rate, mandatory and voluntary, means-tested and universal, etc. In low-income countries, including Africa, the provision of social security is mainly through contributory pension schemes, being mandatory for the formal sector and voluntary for the informal sector. However because of their contributory nature, social insurance schemes are faced with coverage and compliance problems. In July 2001, Sierra Leone established a national social insurance pension scheme which replaced the non-contributory tax-financed government pension scheme that was in existence since independence. The new scheme became effective in January 2002 and currently provides retirement, invalidity and survivors’ benefits to its members and their dependants. After five years of existence, this paper seeks to investigate the coverage and compliance situation in the National Social Security and Insurance Trust (NASSIT) scheme in Sierra Leone. The relevant indicators used in the investigation are the registration rate of legally covered persons, establishment/contributor compliance rate, effective coverage rate of insured persons, proportion of contribution in arrears and administrative cost ratio based on data derived mainly from the NASSIT. The paper further looks at the reasons for the compliance situation and makes recommendations to enhance better coverage and compliance to ensure the financial sustainability of the scheme. Although coverage is found to be generally high, the results shows that not all workers under the legal coverage have been registered with the scheme. As at 2006, up to 15% of workers in the formal sector still remain uncovered. Of the registered members with the scheme, contributor compliance rate is found to be high in the public sector, but low in the private sector- about 60% in 2006.

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