Govt reviews NSSA contribution rates


Government has reviewed upwards NSSA contribution rates as well as the maximum pensionable salary with effect from January 1, 2020.

Govt reviews NSSA contribution rates

The review was made based on independent actuarial valuation, which advised that the scheme could neither pay better benefits to its members nor remain sustainable without reviewing the contribution rate and pensionable salary.

The last contribution review was in 2013.

Statutory Instrument (SI) 108 of 2020 published in the Government Gazette on Friday by the Minister of Public Service, Labour and Social Welfare, Professor Paul Mavima, states that the NSSA contribution rates have been reviewed.

This effectively means the contribution rate is now pegged at 9 percent, from 7 percent as employers and employees contribute equally towards the NSSA scheme. The maximum pensionable income has also been reviewed from $700 to $5 000.

“The National Social Security Authority (Pension and Other Benefits Scheme) (Rates of Benefits) (Amendment) Notice, 1993, published in Statutory Instrument 393 of 1993 (herein after called the “principal notice”), is amended in section 10 (“Rates of contributions”) as follows:

“(a) in 10 A by the deletion of “3,5 percent) and substitution of “4,5 percent” with effect from January 1, 2020 . . .

“The principal notice is amended in section 11(3) by the deletion of “US$700” and the substitution of “$5 000” with effect from   January 1, 2020” states SI 108 of 2020.

NSSA’s Accident Prevention and Workers Compensation Scheme was also amended through SI 109 of 2020 to include a clause that provides additional assistance to grossly disabled pensioners.

“Where a grossly disabled worker who is above 70 per centum disabled does not have adequate accommodation, the general manager may provide rural dwellings for such a worker and such dwellings shall be in a form and condition as determined by the general manager from time to time,” states the SI.

SI 109 basically formalises the Authority’s Project Dzimba that was launched in 2018 to address the same problem.

To date, NSSA has constructed 96 homes for paraplegic and quadriplegic pensioners across all provinces in the country.

NSSA’s acting general manager, Arthur Manase, explained that the reforms would enable the statutory body to decisively deal with the issue of benefits pay-outs.

“The last reforms for NSSA were in 2013 and since then, the Authority made several reviews on pay-outs without addressing the income side of the business. Just last year alone, NSSA awarded the following: a discretionary bonus equivalent to a month’s pension to all pensioners in July 2019; reviewed the minimum pension from $80 to $200 for POBS and $240 for Accident Prevention and Workers Compensation Scheme (APWCS) in October 2019; a bonus equivalent to a 13th cheque in November 2019 and most recently another discretionary bonus equivalent to a month’s pension in April and May 2020. All this was done to cushion pensioners against the rising cost of living.

“These reviews were motivated by our desire to pay out liveable pensions, but the scheme was now under severe stress. The good news is that the reforms will enable us to effectively deal with the core issue of benefit pay-outs, and we will soon be engaging our actuaries to conduct an actuarial valuation to determine the level of benefits that the scheme can afford to pay with implementation of the necessary reforms.

“As usual, the reviews will be taken with consideration on the long-term sustainability of the schemes,” said Mr Manase.


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