NATIONAl Social Security Authority (Nssa) says contributions have declined to 42% in the seven months to September 2017 on the back of continued infomalisation of the economy and liquidity challenges.
By Melody Chikono
Contribution rates have continued to decline with year-on-year figures showing a slip to 48% in 2016 from 52% in 2015.
Nssa marketing and communications executive Tendai Mutseyekwa told businessdigest that Nssa remained undecided on whether to increase the contributory rates in the face of a continued decline in contributions and liquidity challenges.
However, last year government adjusted contributory rate for state employees from 6% (3% employee, 3% employer) to 7% (3,5% employee, 3,5% employer) and the maximum insurable earnings ceiling from US$200 to US$700 with effect from November 1 2016.
“Compliance rate for the period January to September 2017 is at 42%. The rates for 2016 and 2015 were 48% and 52%, respectively. The scheme is valued every three years by independent actuaries who advise on the level of benefits that the scheme can sustain. The actuaries will also recommend if the contribution rates need to be reviewed or not,” he said.
Mutseyekwa said the liquidity challenges have prompted the authority to put in place a Voluntary Informal Sector Scheme, which will start enrolling by end of 2017.
“We are introducing a voluntary informal sector scheme, which is expected to start enrolling people by the end of 2017.
According to Zimstat 2014, the informal sector accounts for 94,5% of employment in Zimbabwe, which represents about six million workers. Informal is the new normal and Nssa is working towards this scheme that will provide social security cover for people in this sector that was previously not covered,” he said.
The scheme will be tailor-made to suit the needs of the target groups to make it both relevant and accessible and is expected to significantly contribute to the authority’s collection base.
An urgent need for the development of appropriate social security packages for the informal sector has been identified, not only to alleviate the vulnerability of workers in this sector, but also to expand the social security contribution base.