PRESS STATEMENT
FOR IMMEDIATE RELEASE
GOVERNMENT UNVEILS SUPPLEMENTARY PENSION REFORMS TO IMPROVE LUMP SUM BENEFITS
GOVERNMENT has announced a comprehensive package aimed at strengthening Zambia’s pension system and improving access to lump sum benefits, while maintaining the sustainability of the National Pension Scheme Authority (NAPSA) and ensuring income security for retirees.
Minister of Labour and Social Security, Brenda Mwika Tambatamba, MP, said the reforms are designed to give members more flexibility and options at retirement, without compromising their long-term income security in form of monthly pensions that protect retirees from poverty in old age.
The Minister was speaking in Parliament yesterday, in response to a private members’ motion moved by Kanchibiya Member of Parliament, Hon Sunday Chanda MP, who proposed that Government reforms the retirement benefit structure under the National Pension Scheme Authority (NAPSA), to give contributors an option of accessing lump sum payments upon retirement.
Among the key proposed measures are increased flexibility lumpsum access. The current 20% partial withdrawal benefit will be expanded to allow members to access this amount at retirement as a lump sum.
Government is also considering on increasing the percentage beyond 20% to enhance members’ financial flexibility at retirement.
Another measure is that a voluntary sub-scheme will be introduced under NAPSA to allow members to make extra contributions beyond the mandatory rate. The extra savings will entitle members to access additional lump sum benefits upon retirement.
Government is also introducing a Second-Tier Pension for Civil Servants. Civil servants such as teachers and health personnel employed after 2000 who currently only contribute to NAPSA, will be allowed to also contribute to the Public Service Pensions Fund while workers under local authorities and utility companies will contribute to Local Authorities Superannuation Fund.
This will create a two-tier system where NAPSA serves as the first pot and PSPF or LASF as the second, enabling civil servants to access up to 40% lump sum benefits. Other measures are the promotion of Private Occupational Schemes.
Government is encouraging employees in the private sector to either create or join existing occupational pension schemes under the Pensions and Insurance Authority (PIA), as over 230 Private Occupational schemes already provide lump sum options for employees.
Ms. Tambatamba emphasised that the reforms are anchored on sustainability and global best practices, in line with International Labour Organisation Convention 102, which permits lump sums under regulated conditions to protect retirees’ monthly income.
She disclosed that the reforms are nearing completion and Government will undertake further consultations in all the provinces, prior to presenting them to the Tripartite Consultative Labour Council and ultimately Cabinet for approval.
“Our goal is to build a pension system that is inclusive, sustainable, and responsive to the needs of all Zambians,” said Ms. Tambatamba.
Issued by:
MWAKA NDAWA
PRINCIPAL PUBLIC RELATIONS OFFICER
MINISTRY OF LABOUR AND SOCIAL SECURITY
I do not think Napsa will agree to this unless you want the institution to completely collapse, issues of disbursements have to be planned, you do not jus wake up and change the cash flow outflow on an organization without consulting with that organization, you will end up creating huge problems for NAPSA which may cause the whole institution to collapse
Congratulations to the Minister of Labour and Security for unveiling of the new reforms on pension.
The workers must enjoy their retirement not to become destitutes or perpetual begars.
I have been writing about the sufferings of people who were retired on the restructuring of the public service between 1997 and 2000.These workers were paid incorrect pension amounts and took government to court.Some were paid the difference and a lot more remained unpaid.This is very sad. Why are people of our country not talking about it the way I do? Some of our clergy sometimes amaze me a lot, they talk much about “ulutoshi” and forget about the plight of these retirees.They need food and to support their families.Making political statements on bunga is the only thing they can see.The opposition and media are too quiet about this but they know too well about some people who are suffering because of a government program that didn’t work well.The constitution amendment program some people are trying to oppose is far much better.We need these constitution reform.You must focus on issues that concern the well being of people too, like pensions.For over 25 years the issue is not resolved despite the matter passing through the high court.Stop fighting government on matters that are being handled well.That restructuring program of 1998 was just a sham.Iam freely writing like this because I felt the pain and I know a lot of people are in pain too.And under normal circumstances it would have been better to reinstate all and retire those who have attained the retirement age and subtract what was paid to them and pay the rest on current pension amount.This is the better Zambia we have been crying for.