The National Social Security Authority (NSSA) says the sluggish pace of economic recovery coupled with retrenchments and low-life expectancy posed a viability risk to the institution as it impacted on revenue collection.
Board chairman Innocent Chagonda, in the authority’s audited financial results for the year ended December 2010, said this presented challenges when planning ahead.
“The pace of economic recovery is still sluggish at best and a number of companies are shedding off labour. This reduces the contribution base for NSSA, while at the same time increasing the pool of citizens in need of social security,” said Chagonda.
He, however, said NSSA remained optimistic that attractive investment opportunities in the country would make the economy pick up and unemployment rates fall significantly.
According to NSSA general manager, James Matiza there were more than 1 900 pensioners who claimed $40 in monthly pensions. Matiza said with the re-introduction of insurable earning of $200 in May last year, hopes of pensions rising more than $40 were dashed. In 2010, claims expenditure totalling $20,84 million which represent a 48% increase were paid out, up from $14,03 million in 1999.
During the period under review NSSA recorded an increase on people claiming worker compensation funds since the advent of multi-currency since “many beneficiaries did not bother to claim as the payouts would easily be eroded by inflation”.
Last year 463 claims compared to 194 in 2009 were received, said Matiza adding that Workers’ Compensation Insurance fund claims expenditure was $6,35 million up from $2,6 million in 2009.
NSSA said it collected $181,4 million for National Pension Scheme and Workers’ Compensation Insurance in 2010 compared to $166,2 million in 2009.
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“The 9% increase was achieved on the back of an increase in insurable earnings ceiling of $200 and a rate of reduction from 8% to 6% with effect from May 1 2010,” said Matiza.
Investment income for the two schemes rose to $22,7 million from $7,7 million. Interest rates obtained on NSSA investments averaged 22% in the past quarter before declining to an average of 17%.
