Half of Zim firms fail to remit workers’ contributions
LIVINGSTONE MARUFU
Nearly half of the total registered companies in Zimbabwe have failed to remit workers’ pension contributions to the National Social Security Authority (NSSA), depriving workers and their families of their entitlements in the event of retirement, death or other developments, Business Times can report.
The bulk of the companies are battling a worsening economic crisis.
They deduct pension contributions from employees’ salaries and wages but decide not to remit these to the State-owned compulsory pension fund, NSSA.
Instead, they are funding their own cash-flows from these deductions.
NSSA’s marketing and public relations deputy director, Tendai Mutseyekwa warned that defaulting companies face hefty penalties and could have their bank accounts raided for contravening the law and disadvantaging their employees.
“The average compliance rate per month for the year 2022 stood at 52%. But, this does not imply that 48% completely defaulted in 2022; rather, some employers comply in one month and fail to comply in other months,” Mutseyekwa told Business Times.
He added: “The consequences of not complying or remitting include levying of penalties and surcharges on outstanding contributions, penalties for late registration, and legal processes such as garnish orders to enforce compliance.
Over and above these penalties, any employer who contravenes any provision of the NSSA Schemes with which he must comply shall be guilty of an offence and liable to prosecution as set out in the NSSA Act.”
It is understood that if contributions are not remitted at the correct time, which is by the 10th day of the month following the month in which employees’ pension contributions are deducted from their wages, then the employer may be tempted to utilise the employees’ contributions for some other purpose.
This is what tends to lead to the huge payment arrears that some organisations accrue.
The employer’s contribution to the pension scheme, which is the same as the employee’s contribution, is 3,5% of each employee’s insurable earnings.
Mutseyekwa said contributions to the national pension fund by every employee in formal employment and his or her employer are compulsory in terms of the law.
The employer is also required by law to make contributions to the Workers’ Compensation Insurance Fund.
He said NSSA could also hold the employer liable for failure to access the benefits he or she would have been entitled to have the payments been made to the Authority.
NSSA carries the liability and has the burden of ensuring compliance by employers, who are the agents of payment in our contributory schemes.
The Authority uses the various enforcement tools as provided for by legislation to ensure that unremitted contributions are collected.
“In an effort to safeguard the sustainability of the schemes, NSSA encourages all contributors and even pensioners to be NSSA heroes and stand firmly against contributions evasion.
“One can report non-registration of employers and employees, under declaration of wages and failure to remit deducted contributions due to NSSA by anonymously reporting using the channels such as toll-free and whistle Blower boxes at all NSSA offices and emails,” he said.
