TINASHE MAKICHI
The pension contributions rate to government-owned pension fund, National Social Security Authority (NSSA) closed August at 55 percent, a position, which highlights the current challenges bedevilling both the private and public sectors.
Every employer of labour is required by the NSSA Act 17:04 to register his business and employees, deduct 3,5 percent from employee’s earnings with an insurable earning ceiling of $700 per month and employer pays an equal amount for the Pensions and Other Benefits Scheme. The Accident Prevention and Workers Compensation scheme is wholly funded by the employer at a rate for the Industry to ensure workers have insurance cover against accidents at work.
“Our compliance rate stood at 55 percent as at August 2018. NSSA contributions and premiums are paid in arrears by the 10th of every month. However due to the prevailing economic environment some employers are failing to pay on time and falling into debt,” NSSA marketing and communications executive Tendai Mutseyekwa told Business Times.
“The Authority enters into debt settlement arrangements which include payment plans with such employers. However, where there is a default on the agreed debt settlement arrangement NSSA then recovers the violated amounts through garnish orders or legal means,” he said.
On another note, contribution arrears to pension funds according to the Insurance and Pension Commission have risen by nine percent to $600 million in the four months to June this year, from $550 million recorded in February.
Josphat Kakwere who is head of pensions at IPEC is on record saying the latest development of nonremittance of pension contributions by companies have deprived members and their families of their entitlements in the event of retirement, death or other developments. These benefits can only be paid to beneficiaries whose contributions and premiums are up to date.
The Pensions Regulations (Statutory instrument 323 of 1991 and 61 of 2014), stipulates that all sponsoring employers should remit contributions within 14 days after the end of each month to which the pension contribution relates.
