adminpension, depending on the individual’s contribution period, but cannot be both.
Some of those claimants paid retirement grants seem to have presumed that this would be followed by monthly pension payments, judging by some of the queries sent to this column.
Only those who have contributed to NSSA’s Pension and Other Benefits Scheme for at least 120 months by the time they retire are eligible for a monthly pension. Those who have contributed for less than 120 months but more than 12 months are eligible for a once-off lump sum retirement grant.
It may be a substantial amount, depending on how long the individual has contributed to the scheme and his or her insurable earnings on retirement. However, it will not be followed by any further payments as it is a single payment. The only subsequent benefit payable is a funeral grant upon the death of the retiree.
Whether or not an individual receives a lump sum or a monthly pension depends entirely on the contribution period. It is not something the individual can opt for. The contribution period and insurable earnings on retirement also affect the amount of the pension or grant.
There are those who have said that they would prefer a lump sum to a monthly pension. It is not something an individual can opt for. A lump sum may seem attractive but remember it is a once-off payment. Although the pension may be low, it is paid for life. After a few years it may well have exceeded the amount that a lump sum would have been.
The normal retirement age for NSSA retirement benefit purposes is 60 years, provided the individual has retired or is unemployed at that age. There is a late retirement age of 65 years for those who wish to continue working until or beyond that age.
Once a contributor to the National Pension Scheme turns 65 years, contributions to the scheme should stop and the contributor should claim the retirement benefit, whether or not he/she is still employed. Any contributions made after the age of 65 years are considered erroneous contributions and are refundable.
There is an early retirement age of 55 years for those who have spent at least seven of the preceding 10 years in a job classified as arduous, such as farm work, heavy truck driving and some mining and quarrying jobs.
However, the criterion for whether a pension or a grant is paid remains the same. There must have been at least 120 months of contributions for a pension to be paid.
For invalidity benefit, the contributor must be below 60 years and must be medically certified as permanently incapable of work as a result of physical or mental ill-health. The contribution period to qualify for an invalidity pension is at least 12 months. If contributions have been made for less than 12 months but for at least six months, the benefit payable is an invalidity grant.
With the survivor’s benefit, whether a grant or pension is payable also depends on the contribution period of the deceased person. It depends on what the deceased person was or would have been entitled to at the time of death.
A pension is payable if the deceased contributor or pensioner was entitled to or would, based on the contribution period, have been entitled to a pension. If the deceased contributor would, based on the contribution period, have qualified not for a pension but a grant, then the claimant receives a survivor’s grant.
A survivor’s pension is only a percentage of the retirement or invalidity benefit that the contributor would have been entitled to. The wife or husband of a deceased contributor normally receives 40 percent of the pension or grant that the deceased contributor was or would have been entitled to.
The surviving children’s benefit is also 40 percent. Parents are entitled to 12 percent and other dependants 8 percent. However, the current minimum survivor’s pension is US$20, which is 50 percent of the minimum retirement pension of US$40.
With the minimum contribution period for retirement pensions being 10 years and the contribution period for a retirement grant being less than 10 years but not less than 12 months, some might wonder what happens to those who have reached retirement age but have contributed for less than 12 months. The answer is that they are not entitled to any retirement benefit but their contributions are refundable with interest.
Talking Social Security is published weekly by the National Social Security Authority as a public service. There is also a weekly radio programme, PaMhepo neNSSA/Emoyeni le NSSA, discussing social security issues at 6.50pm every Thursday on Radio Zimbabwe. Readers can e-mail issues they would like dealt with in this column to [email protected] or text them to 0735 041 278. Those with individual queries should contact their local NSSA office or telephone NSSA on (04) 706517-8 or 706523-5.
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