Informal sector pension scheme ready

Source: Informal sector pension scheme ready – DailyNews Live

BUSINESS WRITER      5 December 2017

HARARE – The National Social Security Authority (Nssa) says it is ready to
administer its voluntary pension scheme for the informal sector.

“Our actuaries are currently working on the model and design of the
scheme,” Nssa chairperson Robin Vela said, adding that the pensions
administrator aims to launch the voluntary informal scheme before the end
of the first quarter of 2018.

Zimbabwe in 1989 set up a compulsory national social security pension
scheme which is provided for by Nssa.

This scheme is important as it provides some form of security during
retirement, invalidity or death of a breadwinner who was a member of the

Since operations by Nssa started in October 1994 there have only been two
schemes: the National Pension Scheme and the Workers Compensation
Insurance Fund.

These two schemes only cover members in formal employment.


However, the informal sector, small to medium enterprises and domestic
workers are not included.

The new scheme, which was expected to have been operational by the end of
this year, will target these previously excluded groups.

According to Nssa, 72 percent of people in the informal sector do not
contribute to any social security scheme. The sector makes up 70 percent
of Zimbabwe’s economic activity and contributes more than 50 percent to
the country’s gross domestic product, according to official statistics.

In terms of social security systems Zimbabwe is lagging behind other
countries in the region and globally.

In India for example the Atal Pension Yojana is open to all Indian
citizens in the 18-40 age group, whether they are formally or informally

Meanwhile, Vela said the minimum retirement pension monthly pay-out was
increased from $60 to $80 from October 1, 2017, in line with the
organisation’s desire to deliver a liveable pension to our pensioners.

“The 33,3 percent  increase was arrived at on the recommendation of the
authority’s independent actuaries who were tasked with coming up with a
sustainable increment,” he said.

Vela added that Nssa’s performance has continued to improve with actual
management accounts to end October showing, for the year end December 31,
2017, a projected double digit percentile increase in all the key matrices
of fund size – investment income, and profitability in excess of the $100
million achieved in the prior year.

“Taking all this into consideration, the board (using its discretion) has
approved a bonus payment equivalent to a 13th cheque to all pensioners
with their December 2017 pension,” he said.

As part of strategies to make life easier for pensioners, Nssa
successfully engaged banks for exemption of bank charges to pensioners,
senior citizens who are 60 years and above.

Currently, all 14 banks that hold Nssa pensioner accounts are offering
this service.