THE National Social Security Authority (Nssa) lost 14 000 contributors in 2015 and in the process millions of dollars due to retrenchments and company closures as the economy continues to struggle.
By Hazel Ndebele
Public Service, Labour and Social Welfare minister Prisca Mupfumira said in her 2015 ministerial statement on the current state of affairs at Nssa that the authority was bleeding due to economic problems.
Nssa provides social security benefits for people in formal employment, which include retirement pension, survivor’s pension, invalidity benefits, children’s allowances and funeral grants.
Mupfumira said the loss of contributors had negatively affected Nssa, which was also owed US$266 million by employers as at December 2015.
“In 2015, Nssa collected US$215 million of which US$172 million was for the pension scheme and US$43 million for the workers compensation insurance funds,” she said.
“These contributions were 7% below the 2014 collections (US$231 million), reflecting the difficult economic environment and the retrenchment that companies undertook in 2015 after the Zuva Judgment of the Supreme Court.”
Nssa has a total of 26 205 registered employers, who employ 1,2 million workers that contribute to the authority. Employers and workers contribute 3,5% of the basic salary to Nssa.
“The board is working tirelessly to collect the arrears as they impact negatively on the future pensions for our workers,” she said.
In 2015, a total of US$107 million was paid to Nssa members for various benefits with retirement pensions accounting for US$53,4 million while survivors’ pensions accounted for US$46,4 million.
However, there are a number of pensioners who have not been receiving pension funds from Nssa despite having retired a number of years ago.
In terms of benefits, Nssa pays out a retirement pension, a surviving spouse pension, children’s pension, funeral grant, invalidity grant and for injured workers, medical costs, prosthetics and wheel chairs.
“The current Nssa pension capped at US$60 per month compares with other pension funds, in Namibia it is US$66, Ghana it is US$53 and Tanzania it is US$30. The comparisons do not however mean that Nssa should not do more in future as the potential to improve on the pension payments is there,” said Mupfumira.
Nssa expenses over the years have been deemed too high by contributors and the public.
According to Mupfumira, a total of US$22 million was spent on staff costs and US$1,2 million on ICT expenses with other costs amounting to US$24 million.
“The total cost of US$47,3 million are too high for a fund generating a total investment income of US$23,5 million on a balance sheet of US$1,3 billion as at December 2014,” she said.
The Nssa board and auditors are currently valuing all the authority’s assets as some appear to have been overvalued when they were acquired.
The investment income performance of Nssa, Mupfumira said, is very poor.
“We have asked the board to recruit qualified leadership to properly manage the pensioner’s fund,” she said.
The investment properties that have attracted public criticism include the Beitbridge hotel, which cost the authority US$45 million, instead of US$7 million which had seen budgeted for the project.
Another project is the Celestial Park in Borrowdale, which cost US$32 million and other expenses amounted to US$3 million against a valuation at the time of purchase of US$25 million. Former Nssa top executives were fired last year for gross mismanagement of funds and poor corporate governance.
Nssa general manager James Matiza earned a basic salary of US$13 768 and benefits of US$19 779, giving a grand total of US$33 547. Matiza also had a company car and 500 litres fuel allowance monthly among many other benefits, Mupfumira said.
“In settling the retrenchment packages, the board accepted the basic salaries but kept the allowances at 40% of basic salary, the board also settled the retrenchment packages at one month for each year worked,” she said.
Matiza’s retrenchment package was capped at US$22 000. The total package payable to the retrenchees was US$1 475 302.
However, the net payment from the authority was reduced as loans were all recovered and expected loans were more than the packages.