Framework for informal sector pensions set

Actuaries at the National Social Security Authority are redesigning the Voluntary Informal Sector Scheme, which is targeted at providing pensions to millions of Zimbabweans in the informal sector.

The first draft failed to get buy-in from stakeholders.

The scheme, which should provide universal social security coverage, is expected to be launched later this year.

According to the Zimbabwe Labour Market Information 2015 Report, 94,5 percent of the country’s active labour force operates in the informal sector.

NSSA general manager Mr Emerson Mungwariri told The Sunday Mail last week that the new effort was borne out of extensive consultations.

“The authority conducted extensive stakeholder consultations across the country throughout the second half of 2017, into early 2018.

“Useful feedback was gathered during the consultations, which has made it necessary for NSSA to revisit the design of the scheme in order to align it to the specific needs and expectations of the targeted beneficiaries,” said Mr Mungwariri.

“The design of the scheme is spearhead by the authority’s actuaries, after which the redesigned product will be taken to the market.

“NSSA is sensitive to the need to introduce a product that will be fully embraced by the market and will ensure that it takes the necessary steps to ensure that this happens in the shortest possible time,” he added.

It is understood that scheme-holders will make voluntary periodic contributions to NSSA up to a yet-to-be-specified age before receiving their retirement benefits. In the case of death, surviving spouses and close relatives will benefit.

NSSA operates the National Pension Scheme, under which all formally employed Zimbabweans make a monthly contribution before receiving pension benefits upon reaching 60 years — the formal retirement age.

Unlike some schemes for the formally employed, where employers and employees make equal contributions to NSSA, the new scheme will be solely financed by contributors.

Countries like Ghana and Uganda offer pension cover for informal sector workers. Last year, Uganda’s pensions regulator issued licences to two private firms to extend social security benefits to the informal sector.