Parliament calls for NSSA overhaul
PARLIAMENT has ratcheted pressure on government to overhaul the National Social Security Authority (NSSA) after public consultations supported a shake-up of the public pension scheme.
A recent inquiry into the operations of the pay-as-you-go pension scheme by the Parliamentary Portfolio Committee on Public Service, Labour and Social Welfare came up with various recommendations.
During consultations, the committee heard that Zimbabweans had largely lost confidence in NSSA and were unhappy with the way it is structured.
Workers’ grievances centred on poor representation on the NSSA board, despite them being key stakeholders.
All formal-sector employers are legally obliged to register with NSSA and deduct monthly contributions from employee salaries to go towards NSSA pensions and other benefits scheme.
The maximum insurable earnings limit is US$700 and the national pension scheme deduction from an employee’s salary is 3,5 percent of the basic salary, if the employee earns US$700 or less a month.
For those earning above US$700 a month, the deduction is 3,5 percent of US$700, which is US$24,50. The employer makes the same contribution as the employee.
NSSA will then later pay retirement pensions, disability pensions, survivor benefits, and invalidity pension and funeral services to members as and when required.
However, NSSA has been criticised for its very low payouts that are also hard to access.
To generate more money, NSSA has been investing in various sectors, notably property, health and tourism, but Parliament believes NSSA has serious structural defects that need to be addressed as a matter of urgency in order to make it more effective.
The committee recommended a major overhaul of the institution and the operating system, starting with the board, which has been non-existent for the past two years or so.
Stakeholders have outlined a myriad of grievances against NSSA.
They said the authority has deviated from its co-mandate of workers’ social welfare and is now concentrating on investments.
Stakeholders also want the NSSA board to have wide consultations with the workers before making decisions.
“Stakeholders further complained about the structure of the NSSA board sub-committees, consisting of six members each. The committee was informed that this arrangement compromises workers’ interests since they have only three representatives on the board, which makes it impossible for them to have representation in the sub-committees where major decisions are made,” partly reads the report.
Employees also complained about difficulties in accessing loans channeled through banks and the Small Enterprise Development Corporation and their exclusion from the occupation health and workers’ compensation schemes.
They also said many companies were defaulting on monthly remittances, thereby prejudicing workers.
The scheme was also found to be incomprehensive as it leaves out the informal sector and domestic workers.
NSSA was also criticised for its housing scheme which is ideally meant to benefit low income earners but whose housing units are well beyond the reach of the intented beneficiaries.
In its recommendations, the committee urged the parent ministry to review the NSSA Act, the legal statute from which NSSA was born, mainly to ensure fair representation of the workers and decentralisation of its services that are currently concentrated in Harare.
“NSSA should make deliberate efforts towards increasing workers participation in decision-making and updating beneficiaries of developments since it is a publicly financed entity,” reads the report, which further proposed a limit of the chief executive officer’s tenure of office to two five-year terms renewable only subject to outstanding performance.
The committee also recommended a reduction in the legal retirement age from 65 to between 45 and 50 to allow for members to start receiving benefits as soon as they retire, or even before, because Zimbabweans’ life expectancy has sharply declined in recent years, meaning that many workers were dying before they reached the age where they would enjoy their pension benefits, while listed beneficiaries endure difficulties in accessing them.
According to the United Nations Economic Commission for Africa, the current life expectancy in Zimbabwe is estimated to be 54 years and 52 years for males and females respectively.
Parliament also called on NSSA to increase the pensioners’ monthly benefits from US$60 to US$150.
“On the basis of multi-million dollar projects NSSA is currently engaged in, the entity has adequate capital to increase monthly pension benefits from US$60 to US$150, an amount which should be payable to survivors in the event of death of actual member so that there is meaningful social impact on lives.”
The committee is chaired by Gutu East legislator, Bertha Chikwama.