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Enacy Mapakame
Business Reporter
The National Social Security Authority (NSSA) says employees have an obligation to regularly check the status of their pension contributions and membership record to avoid surprises at the time of claiming benefits.
According to the United Nations, contribution towards pension funds is critical as it ensures social protection, which is a basic human right.
Social protection is crucial for cushioning against shocks, vulnerability and deterioration in living standards. This form of retirement insurance is also important as a social or economic stabiliser, building human capital and sustaining livelihoods.
Yet pension contributions have been on the decline as businesses closed or downsized operations while others deliberately evaded contributing towards the fund.
Many companies do not eventually remit workers’ contributions despite deducting the funds from employees’ earnings over time.
Responding to questions during an Insurance and Pensions Journalists Mentorship Programme recently, NSSA acting deputy director, contributions and compliance Southern Region, Vusa Mdlongwa, said poor voluntary compliance was one of the challenges affecting contributions by employers.
As a result, he said it was imperative for employees to also take the responsibility of ensuring the employers were compliant to avoid complications when the need for pension payout arises.
“We have cases where employers deduct contributions from employees but fail to remit the funds to NSSA.
“It’s a challenge when one realises there is no record of their contribution after working for over 10 years, which is why employees should also come to check the status of their contributions.
“This will allow the authority to quickly move in, investigate the matter and try to address the anomaly,” he said.
According to NSSA, currently, the employer and employee contribute an equal amount of 4,5 percent each of insurable earnings up to a maximum ceiling.
“The insurable earnings ceiling is now being adjusted on a quarterly basis in line with the self-adjusting framework. Employers paying salaries in both Zimbabwean currency and USD currency are required to deduct and pay contributions in both currencies subject to the insurable earnings ceiling ruling at the period.
“Foreign currency remittances – income earned, received, or accrued in whole or in part in foreign currency, shall pay contributions in foreign currency,” he said.
The authority has previously indicated that the contributor base has been shrinking due to a number of factors among them companies downsizing operations while others are operating without regularising their businesses.
However, NSSA has indicated it is working on efforts to increase the contributor base, among them luring the informal sector to formalise their businesses and start contribution towards social protection. With regards to the informal sector, this move will also help improve financial inclusion and literacy within this sector that has over the past decades been driving the economy as big corporations downsized operations or eventually closed.
Online Reporter