Pensions offered by NSSA

the circumstances of the beneficiary or contributor.
NSSA administers two schemes at present. These are the Pension and Other Benefits Scheme and the Worker’s Compensation Insurance Fund.

The Pension and Other Benefits Scheme provides for a pension or grant to be paid when an employee reaches pensionable age and for a lesser benefit to be paid to surviving dependants in the event of the employee, who has been contributing to the scheme, dying.
Whether a pension or a grant is paid under this scheme depends on the contribution period. A minimum of 120 months contributions is required for a monthly pension. Those who have contributed for between 12 months and 119 months are paid a lump sum grant, rather than a pension.

The minimum retirement pension paid by NSSA to qualifying contributors to the national pension fund is US$40 per month.
The actual pension paid may be more than this, depending on the pensioner’s contribution period and the insurable income on which contributions were based at the time of retirement. As has been mentioned before, those who retired when there was no insurable earnings ceiling are being paid much higher pensions – some of them more than US$500 per month – than those retiring now.

This is because their pension was calculated on the basis of their gross income at retirement, rather than an insurable income ceiling of US$200 per month.
There is also an invalidity pension, equivalent to about 40 percent of the normal pension, for those who have not yet reached the pensionable retirement age of 60 but who are unable to work due to a medical condition that makes any type of work impossible. A widow is not paid the full pension her husband would have been entitled to. She is paid about half that amount as a surviving dependant benefit.

The Worker’s Compensation Insurance Fund is intended to compensate workers who are injured or incapacitated as a result of a workplace accident. The Worker’s Compensation Insurance Fund premium is much lower than the national pension fund contribution. It varies according to the risk profile of each industry. Only the employer contributes to this scheme.

Short-term compensation is paid to those temporarily unable to work as a result of the injury. However, a pension is paid to those who are permanently disabled as a result of a workplace accident, where the permanent disability is assessed as being more than 30 percent.
In addition to the pension, NSSA provides constant attendants to assist paraplegics, quadraplegics and other seriously disabled workers whose disability is due to a work-related accident. This disability pension is unrelated to the retirement pension.

It is also unrelated to the invalidity benefit payable from the retirement pension fund where a person is medically certified as incapable of working.
The disability paid from the Worker’s Compensation Insurance Fund, which is administered separately from the retirement pension scheme, is specifically for those who have been disabled as a result of a workplace accident.

Allowances for children up to the age of 19 years old are included in the disability pension paid under the Worker’s Compensation Insurance Fund. If the employee dies as a result of a work-related accident, a grant is paid towards funeral expenses. The employee’s widow or widower receives two-thirds of the pension that would have been due to the employee if he or she had survived the accident.

The two schemes – the Pension and Other Benefits Scheme and the Worker’s Compensation Insurance Fund – are administered completely separately. The contribution rates are different and the benefits are different.

Both, however, have provisions for pensions and both are administered by NSSA, which may lead to confusion in the minds of some people who are receiving pensions.

• The Talking Social Security Column is published by the National Social Security Authority as a public service. Readers who have any questions are welcome to e-mail their questions to [email protected] or send an SMS to 0772 469 801. Those who have individual queries they would like addressed directly should contact their local NSSA office or telephone NSSA on (04) 706517-8 or 706523-5.