Source: NSSA to effect upward review of pension payouts | The Sunday Mail September 22, 2019
The National Social Security Authority (NSSA) will soon effect an upward review of pension payouts to improve the welfare of pensioners and cushion them from the economic challenges.
This follows a Government decision in July this year, to award a once off discretionary bonus equivalent to a month’s pension to cushion pensioners from the general increase in the cost of living.
The actual percentage increases could, however, not be ascertained this week, as NSSA is still in the process of consulting some stakeholders.
NSSA marketing and communications executive Tendai Mutseyekwa, said an actuarial evaluation was currently under way to guide the authority in the review exercise.
He said the decision for an upward review for monthly pension payouts, was taken as a stop gap measure, while waiting for the conclusion of a mid-term actuarial review that is being carried out as an urgent matter following significant progress made in the preparation of the authority’s financial statements for the year ended 2018.
The review, which had already been in consideration, was hampered by the economic challenges, mainly inflationary pressures, which prompted the authority to do another valuation that captures the obtaining economic developments.
The first draft of the report is expected to be completed by end of this month.
“Recent developments in the economy have negatively impacted on the pension increase that was under consideration, hence, the decision to conduct another actuarial valuation,” said Mr Mutseyekwa by email last week.
“The actuarial valuation, which is being conducted by consultants, will guide NSSA in determining the level of benefits reviews, taking into account the long term sustainability of the schemes. The first draft of the report is expected to be presented to NSSA by the end of September 2019,” he said.
Inflationary pressures have severely weakened consumer spending, with pensioners being the hardest hit.
With the exchange rate on the parallel market at 1:20, a pensioner earning $33 a month, effectively earns US$1,65 for the entire month. At such a pay rate, such a pensioner can only buy 2kg of sugar. As of Friday, a 1,5kg packet of chicken was going for an average $41 while 2L cooking oil is now pegged at an average $42 and mealie meal at $46 a 10kg pocket.
Principal beneficiaries are receiving minimum payouts of $80 per month, while the surviving beneficiaries are receiving a minimum of $32. The last increase was in October 2017.
World Bank rates poor countries as those with individuals surviving on US$1,25 a day.
With the cash shortages dating back to 2016, pensioners endure long queues, while other sleep at the bank to receive their paltry earnings.
Those who live in rural areas are the hardest as transport costs to the bank gobbles up the entire earnings, while in some cases even five months pension payout will not be enough to cover for the return journey home.
Some pensioners have argued that the pension payouts during these inflationary moments be indexed at exchange rate to preserve value.
NSSA is one of the biggest pension management companies in the country, managing over US$1 billion worth of assets.