Analysis: MAXWELL PHIRI
IT IS compulsory for every citizen, whether in the formal or informal sector, to have a social security scheme.
This helps to prepare employees for a fruitful retirement scheme and avoid destitution.
You may wish to know that having a social security scheme for workers is a right and not a privilege. The right to social security is key for economic growth of a country, especially for developing nations like Zambia.
Regular income in old age is an important element of the rights to social security and an adequate standard of living. The right to social security is recognised in a number of international and regional instruments, including the following:
• Universal Declaration of Human Rights (1948).
• International Covenant on Economic and Social Rights (1966).
• Income Security Recommendation 1944 (No 67).
• African Charter on Human and People’s Rights (Banjul Charter) 1981.
• SADC Code on Social Security.
Social security plays an important role in the lives of the aged. The following bullet points illustrate the benefits of social security:
• Regular income enables the aged to access services such as health care.
• Increases their standing in society in that they do not become a burden in their communities.
• They are empowered and live a dignified life.
• Generally, poverty levels are reduced.
• There are spillover effects in that child poverty is reduced as a result of increased school enrolment and nutritional intake.
• Pension supports economic growth as it promotes agricultural development in rural areas.
Another significant importance of social security in a country is through:
• Social protection: The idea of ‘social security’ implies that people ought to be able to feel secure.
This involves not only being protected against poverty, but being protected against the hardships that may arise through a change in circumstances. If people become sick, or unemployed, they should not, the argument goes, have to lose their possessions or deprive themselves as a result. This is why people on benefit should be expected to have cars and television sets.
• Redistribution: Benefits which go to people who have inadequate incomes, at the expense of people who have more, are progressive.
Support for children, by contrast, is mainly a form of horizontal redistribution, going from people without children to those who have.
In Zambia, the government is not lagging and this can be attested through establishment of the National Pension Scheme Authority (NAPSA) in 2000 to enhance the social security scheme by transforming from the then Zambia National Provident Fund (ZNPF).
Currently, there are several social security schemes in Zambia, of which NAPSA is the largest with an estimated coverage of eight percent of the labour force.
Other schemes include the Public Service Pension Fund (PSPF), established under the Public Service Pensions Act, and the Local Authority Superannuation Fund (LASF), established, under the Local Authorities Superannuation Fund Act.
As highlighted in the National Pension Scheme Act, one of the main provisions therein is that membership to the scheme is compulsory for all employed persons. This covers all categories of employment for as long as a contract of service between the employer and the employee exists.
It should further be clarified that a contract of service can be written or verbal. Therefore, every individual, association, institution or firm with a written or verbal employer or employee contract of service is required to register with NAPSA.
As much as the contract of employment indicates that one is an employer and others as employees, even the registration with NAPSA should have the same detail, unless an employee is referred to as a member.
Therefore, all employers, regardless of whether they are categorised as small and medium enterprise (SMEs) or multinational organisations, still have to register their workers with NAPSA as this gives the workers a peace of mind at the time of their retirement.
Equally, employees have a duty to advise employers to get registered with NAPSA even if they are working for a small Chinese company; it is now mandatory to have all employees covered under NAPSA.
I know some employees who are hiding under silos by not reporting their employers who have not registered their companies with NAPSA. Think twice –should you protect your employer who is not registered with NAPSA at the expense of your retirement? It does not make sense at all.
For those employees who have registered with NAPSA, kindly make a habit to be visiting NAPSA offices or, better still, use E-NAPSA to check your contributions because there is a tendency by some employers of not remitting contributions despite deducting from members of staff.
Let me also echo that preparing for retirement is a personal matter. It’s never too late; you can start now.
Remember, my goal is to ensure that you do not just retire, but you should retire smiling.
The author is a seasoned pension advisor and director for human resources and administration at the Rural Electrification Authority.