Source: NSSA to expand contributor base | The Herald
Enacy Mapakame Business Reporter
The National Social Security Authority (NSSA) is looking to widen the number of contributors covered by its pension schemes from the current 1,4 million active members in order to secure their future upon retirement.
A total of 1,8 million registered members, slightly more than the total for contributing members, are inactive, according to the social security authority.
This comes as the contributor base has been shrinking due to a number of factors among them companies downsizing operations while others are operating without regularising their businesses.The authority has indicated it is working to expand the contributor base, part of the initiatives entails luring the informal sector to formalise their businesses and start contributing towards social protection.
“We are looking at increasing coverage by developing an informal sector scheme,” NSSA acting general manager Dr Charles Shava told journalists at the launch of the Insurance and Pensions Journalists Mentorship Programme 2023 recently.
“We currently have 1,4 million covered. One of the challenges is that we have businesses that do not register their operations.
“We are looking at improving coverage with blitz teams going out to enforce compliance, we hope this will increase numbers,” he said.
With respect to the informal sector, the move will help improve financial inclusion and literacy within this sector that has over the past decades been driving the economy, as big corporations downsized operations or eventually closed.
According to the World Bank, Zimbabwe has one of the largest informal sectors in the world, which lags behind in financial literacy and inclusion. However, the country is making efforts to lure this critical sector to increase its tax and pension contributions.
For instance, the Zimbabwe Revenue Authority has for a while been working on helping the sector formalise its businesses to increase revenue contribution to the tax coffers.
With regards to pensions, the Insurance and Pensions Commission (IPEC) has developed a draft micro-pensions framework in its endeavour to foster financial inclusion and grow the pensions industry by encouraging pension products for low non-standard workers or the informally employed.
A micro-pension/provident fund is a voluntary fund with both savings and retirement benefit entitlements that support small, irregular and sustainable savings by individuals to provide them with a regular stream of pension annuities or lump sum in old age.
“This is also in line with driving the financial inclusion agenda through complementing Government efforts in pursuant of the National Financial Inclusion Strategy and contributing towards the attainment of the United Nations Sustainable Development Goal Number 1 of eradicating poverty in all forms.
“The guideline is, therefore, part of the Commission’s pension reforms aimed at expanding pension coverage to the self-employed, informal sector and low-income earners, in order to address issues of old age poverty,” IPEC Commissioner Dr Grace Muradzikwa stated in the draft framework
According to the United Nations, contribution towards pension funds is critical as it ensures social protection, which is a basic human right. It is identified as crucial in protection against shocks, reducing vulnerability, preventing deterioration in living standards, social or economic stabilizers and building human capital, livelihoods.
According to the United Kingdom-based Governance and Social Development Resource Centre (GSDRC), the need for social protection cannot be overemphasised especially in the sub-Saharan Africa region.
The need for social protection is greater in sub-Saharan Africa than in any other region in terms of the depth of poverty and the range of vulnerability factors.
Half of the continent’s population live in chronic poverty. The prevalence of undernourishment is twice as high in Africa as in the ‘developing world’ as a whole, according to the GSDRC.
National Business Council of Zimbabwe president Dr Langton Mabhanga said the role of contributing towards social protection could not be overemphasised.
He said despite experiencing periods of abundance and surplus due to increased agriculture and mining production, it remained key for businesses to contribute towards pension funds like the mandatory NSSA Pension to cushion employees during retirement.
“Certainty both our nation and economy have volatile evolutions. The economy has now transitioned into a much steady tapestry and evidently, with consistent traction, well set on a growth trajectory,” explained Dr Mabhanga.
He, however, cautioned that: “When the undesirable incidents strike, which normally occur when least expected and in massive magnitude, there might be insufficient cash flow capacity to sustain the necessary medical interventions.
“Such times are NSSA’s moments to answer, both materially and emotionally. Emotional therapy is priceless in such situations. Furthermore, NSSA will pursue employer with further risk assessment and analysis to avert recurrence of such incidents, sufficing to say that they already provide seamless health and occupational safety inspectorate services.”
In Zimbabwe, inflationary pressures and exchange rate volatility have been a huge challenge not only for businesses across sectors but for pensioners as their earnings have been significantly eroded albeit the Authority implementing periodic pension reviews to cushion them.
The authority also indicated earlier this year stakeholder engagements for improvement of pay-outs, with pensioners also asking for US dollar-denominated pay-outs.
As at February 2023, the POSB minimum retirement pension was pegged at $41 496.
“The current inflationary environment has eroded the purchasing power of people’s incomes. Pensioners have not been spared from this negative phenomenon.
“The disturbances in Russia and Ukraine contributed to the increases in prices of commodities in the Country. This has the potential to put pensioners into poverty and vulnerability,” said Dr Shava.
” secure their future upon retirement ”
contributing since 1994
retired last year
Monthly pension ZWL 41,000 $0 USD !!!!!!!!!!!!!!
NSSA has just fleeced the people !!!
Money making scam for u know who !!!