News / Local
Only 7% of Zimbabweans contributing to social security, says NSSA
18 Dec 2020 at 17:52hrs | Views
A total of 1,3 million people out of the total population of 14,9 million, representing 7% are currently contributing to social security administered by the National Social Security Authority (NSSA).
This marks a sharp decline from the 20% that was making contributions in 2018.
"The (current contributions) figure is less than 20% (contributors in 2018), because the economy is now moving towards (the) informal sector, which is not currently covered by NSSA," said NSSA marketing and communications executive Tendai Mutseyekwa.
This is despite an increase in the number of companies and sole traders making contributions to social security that rose to 28,234 as of November 30 from 24,623 in 2018, according to statistics from the Authority and translates to a legal compliance rate of 53%, which is 3% lower than the 56% for same period in 2018. The legal compliance rate refers to the compliance ratio or percentage against the total active employer database.
Mutseyekwa said apart from the informalisation of the economy, NSSA contributors were greatly affected by the Covid-19 induced lockdown. He said the average compliance rate for the first 11 months of 2020 stood at 51%, which is 7% lower than the 58% that was posted in the same period in 2019.
"The Covid -19 induced lockdown affected pension contributions as it impacted normal business operations for employers. Field visits by the NSSA compliance inspectorate team were also suspended during lockdown," he said.
Mutseyekwa hastened to stress that although the legal compliance rate is on the lower side (at 53%), the Authority ensures that most of the top employers of labour pay their obligations religiously, in a bid to improve social security coverage.
He reiterated that all employers must submit their monthly returns by due date. P4 forms for example should be sent by the 16th of every month while P3 and P4C forms should be submitted within 30 days of hiring or terminating labour, respectively.
Mutseyekwa further advised employees to verify their registration status at nearest NSSA offices while they are still employed to avoid delays of pension processing on retirement.
He indicated that there are 196,808 pensioners and beneficiaries as of December 2020.
Meanwhile, the number of unclaimed benefits under the Insurance and Pensions Commission (IPEC) jumped by nearly 210% to 154,957 members as of September 30 from as low as 49,996 members during the same comparative period in 2018.
IPEC attributed the surge to the inclusion of members from the Clothing Industry Pension Fund that were previously excluded. "The big jump in the number of unclaimed benefits compared to September 2018 is because of the inclusion of members previously excluded by the Clothing Industry Pension Fund," said IPEC public relations manager Lloyd Gumbo.
Gumbo further indicated that deferred and suspended pensions have fluctuated over the past two years.
Statistics availed by IPEC revealed that deferred pensioners increased to 353,526 from 311,705 while suspended pensioners marginally decreased to 12,423 from 12,930 during the same comparative period.
Gumbo added that IPEC currently have a total of 326,956 active members where 35,497 are receiving their pension payouts as of September 30.
He indicated that most pension contributors were affected by the Covid-19 induced lockdown which was effected since end of March.
"Yes, it is because some sponsoring employers were not generating income, as such they could not pay pension contributions.
"The other effect of Covid-19 on the pensions industry is that, given that it is heavily invested in real estate, some tenants requested for rental holidays or deferment in the process affecting liquidity, which is critical for the payment of benefits to pensioners," said Gumbo.
There is approximately 890,000 members in private occupational pension schemes shared between IPEC and the National Social Security Authority (NSSA).
According to the Zimbabwe Statistical Agency's 2017 Inter-Censal Demographic Survey (ICDS), the country's working age population is slightly over 8 million based on the International Labour Organisation's description of economically active population being 15 years and above.
The statistics have not yet been updated.
This marks a sharp decline from the 20% that was making contributions in 2018.
"The (current contributions) figure is less than 20% (contributors in 2018), because the economy is now moving towards (the) informal sector, which is not currently covered by NSSA," said NSSA marketing and communications executive Tendai Mutseyekwa.
This is despite an increase in the number of companies and sole traders making contributions to social security that rose to 28,234 as of November 30 from 24,623 in 2018, according to statistics from the Authority and translates to a legal compliance rate of 53%, which is 3% lower than the 56% for same period in 2018. The legal compliance rate refers to the compliance ratio or percentage against the total active employer database.
Mutseyekwa said apart from the informalisation of the economy, NSSA contributors were greatly affected by the Covid-19 induced lockdown. He said the average compliance rate for the first 11 months of 2020 stood at 51%, which is 7% lower than the 58% that was posted in the same period in 2019.
"The Covid -19 induced lockdown affected pension contributions as it impacted normal business operations for employers. Field visits by the NSSA compliance inspectorate team were also suspended during lockdown," he said.
Mutseyekwa hastened to stress that although the legal compliance rate is on the lower side (at 53%), the Authority ensures that most of the top employers of labour pay their obligations religiously, in a bid to improve social security coverage.
He reiterated that all employers must submit their monthly returns by due date. P4 forms for example should be sent by the 16th of every month while P3 and P4C forms should be submitted within 30 days of hiring or terminating labour, respectively.
Mutseyekwa further advised employees to verify their registration status at nearest NSSA offices while they are still employed to avoid delays of pension processing on retirement.
He indicated that there are 196,808 pensioners and beneficiaries as of December 2020.
Meanwhile, the number of unclaimed benefits under the Insurance and Pensions Commission (IPEC) jumped by nearly 210% to 154,957 members as of September 30 from as low as 49,996 members during the same comparative period in 2018.
IPEC attributed the surge to the inclusion of members from the Clothing Industry Pension Fund that were previously excluded. "The big jump in the number of unclaimed benefits compared to September 2018 is because of the inclusion of members previously excluded by the Clothing Industry Pension Fund," said IPEC public relations manager Lloyd Gumbo.
Gumbo further indicated that deferred and suspended pensions have fluctuated over the past two years.
Statistics availed by IPEC revealed that deferred pensioners increased to 353,526 from 311,705 while suspended pensioners marginally decreased to 12,423 from 12,930 during the same comparative period.
Gumbo added that IPEC currently have a total of 326,956 active members where 35,497 are receiving their pension payouts as of September 30.
He indicated that most pension contributors were affected by the Covid-19 induced lockdown which was effected since end of March.
"The other effect of Covid-19 on the pensions industry is that, given that it is heavily invested in real estate, some tenants requested for rental holidays or deferment in the process affecting liquidity, which is critical for the payment of benefits to pensioners," said Gumbo.
There is approximately 890,000 members in private occupational pension schemes shared between IPEC and the National Social Security Authority (NSSA).
According to the Zimbabwe Statistical Agency's 2017 Inter-Censal Demographic Survey (ICDS), the country's working age population is slightly over 8 million based on the International Labour Organisation's description of economically active population being 15 years and above.
The statistics have not yet been updated.
Source - finx
