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Insurance firms offer alternative for social security

PREPARATION to settle down a health and rich pensioner after hard work is not an option, whether we want it or not, one day we will retire. It is true from the scriptures, although there is no biblical principle, that a person should retire from his work when he reaches a certain age.

However, we have an example of the Levites (Numbers 8:24-26), who were to retire from regular physical engagements at the age of 50 but were encouraged to assist their brothers. Let me emphasise here that you retire from the circular world with work-related matters but not from serving the Lord.

My major concern is that in Africa, do we have pension schemes that will sustain workers from being destitute after retirement? In case you have an existing scheme with your current feesemployer, the other concern is, is it viable to see you through during your retirement period as a pensioner?
Last month, I attended a public administrators annual conference and through interaction, I met one of the Black American presenters from Cincinnati, USA. He is a retiree, about 60 years of age. He loves Africa so much and he proudly calls himself Black African-American not Black American-African.
He told me that he has flown to Zambia more than twice and all his trips are self-funded, including hotel accommodation. I said what? He concluded by saying that as a retiree, he gets monthly annuities which cover all his travel and accommodation expenses. As if that was not enough, he told me that from Zambia, he will be connecting to Ghana to attend another conference called Power Energy, all at his cost. He loves Zambia and is planning to come back. This is the preferred solid pension scheme we should advocate as a continent where people retire rich and healthy and they do not dream of getting back into full-time employment. By so doing, they will be leaving room for the new graduates, unlike in a situation where people want to hang onto jobs up to 65 years.
Whereas a retiree from the Western world can afford to fly to any part of the globe, taking a return trip to China can render an African pensioner destitute. It is therefore important that we put in place sound and sustainable pension schemes.
Employees are at liberty to source for their own tailored pension schemes in instances where employers are unable to provide a sound pension scheme.
Insurance firms offer such policies and, better still, you can consult the regulator, the Pensions Schemes Authority (PIA), on how you can source for a better pension scheme.
In Zambia, we have over 15 insurance companies which provide social security schemes through monthly individual contributions.
Insurance is an important element of any sound financial plan. Different kinds of insurance help protect you and your loved ones in different ways.
The insurance decisions you make should be based on your family, age, and economic situation. There are many forms of insurance and, unfortunately, no one-size-fits-all policy. Life insurance, for example, can be a virtual necessity, especially if you have a spouse and children. Disability insurance, which provides an income stream if you are unable to work, is important for everyone.
Don’t rely solely on government programmes. With an aging population and uncertainty about the future of social security, insurance can cover the cost of living after one’s retirement. Some organisations, such as AON Zambia, can provide useful information on long-term social security insurance schemes.
Other insurance companies such as the Zambia State Insurance Corporation, Professional Life Assurance Company, AON Zambia, etc, understand your needs as well as the role of the various kinds of insurance within an individual’s financial capacity, they can help you with the policies that are most appropriate for you. Your financial expert can provide you with costs and complete details.
Regardless of your employment status – formal or informal – it is advisable that you engage an insurance company to package a social security policy for your retirement. Some people do not have a social security policy thinking that it only applies when one is in gainful employment. However, it does not work like that, even bus conductors at Intercity bus terminus are eligible to approach any insurance firm for a social security cover.
In the next article, I will delve into the insurance social security investment schemes available on the market.
Until next week, remember you need to retire healthy and rich.
The author is a human resources practitioner and pension advisor.