Moses Solani (77) regards himself as a victim of time and circumstance.
At a time he should be enjoying the comfort and ease of his post-working years, his life is now a sorry tale of abject hardship and penury.
The measly monthly $50 pension payout he gets from the National Social Security Authority (NSSA) seems to mock him.
Its like mockery of my working life, he said. Its too little to sustain my life, but that is all I have. Its a life of struggle.
Solani, who has now retired to his rural area in Madziva, has been forced to grow and sell vegetables to augment his pension.
His story is a reflection of the struggle that many Zimbabwean pensioners, especially those at the low end of the pay scale that runs from a paltry $40 to $1 447 often find themselves in.
NSSA is a corporate body created through the NSSA Act (1989), Chapter 17:04, with a specific mandate to ensure an individual in life situations that threaten their livelihood sickness, workplace injuries, unemployment, invalidity, old age and retirement is well cushioned.
NSSA has notable equity investments in FBCH, Fidelity Life, OK Zimbabwe, Turnall, Zimplow, AICO, ZHL and ZBFH. Several companies and institutions are said to owe their continued existence to NSSA, which came to their rescue in times of need.
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It is against this backdrop that many have accused NSSA of paying out pensions close to peanuts. Pensions expert, Martin Tarusenga, who is also a Zimbabwe Pensions and Insurance Rights board member, argued there was need to re-look the countrys pensions system.
In my view there should be a total review of the benefit structure taking into account how much NSSA has received since it was set up and how much has been paid, suggested Tarusenga.
He says NSSA should increase pension payouts in consideration of the value of their obligations to all members at a given time, value of their assets and fund and past and future expected investment performance of NSSA.
For the first time since the dollarisation of the economy, NSSA released its full-year results to December 2010, which showed a net surplus of $142,6 million, up 36,5% from 2009. Its income grew by $13,4% to $200,2 million. Premium contributions were pegged at $181,4 million against claims of $27,1 million.
Tarusenga says the authority should publish this information at least once every three years in typical pension fund administration practice and enable the public to make informed requests for pension increases.
NSSA general manager James Matiza, however, said it was not within their powers to determine pension earnings as these were dependent on the pensioners insurable earnings at retirement and the pension contribution period.
Matiza said it was unfair to assume $40 was all that a pensioner got, as there were several determining factors.
The $40 pension so often quoted in the Press is only the minimum pension being paid. It is paid to those whose entitlement, based on their contributions period and insurable earnings, would be less than this amount had NSSA not set $40 as the minimum pension payment, he said.
He said there were several factors that determined payouts, including actuarial counsel.
We rely on the advice of actuaries, who are professional analysts skilled in making future financial projections. They are the experts and best equipped to advise (us) on what NSSA can afford to pay in benefits, after taking into consideration contributions, investments and investment revenue, he said.
Although Tarusenga said he did not doubt NSSAs reliance on actuarial advice, there were other factors worth considering, including the 2009 transition from the Zimbabwe dollar to the multiple currency regime.
Unfortunately actuarial advice is not necessarily correct. Look at the current pension disgruntlements. It looks like the actuaries got it all wrong when you look at the sums. Even worse, the actuarial valuations that actuaries churned out prior to dollarisation, turned out to be useless pieces of unnecessarily expensive reports, he said.
They failed to do their job of anticipating and controlling pension fund risks including inflation risk, exchange rate risks and interest rate risks.
Tarusenga said there was no certainty regarding terms of reference NSSA gave to its actuaries and whether or not their terms of reference were in touch with requirements of their members and pensioners.
They (NSSA) could potentially be relying on bad actuarial advice, he argued.
Actuarial consultant Tawanda Chituku said rapidly changing economic conditions affected the basis of actuarial advice.
He said institutions like NSSA may have suffered from negative returns in the transition from the Zimbabwe dollar to the multiple currency system.
He, however, said the issue of low pensions in Zimbabwe was serious and needed to be looked into so an effective way forward could be mapped.
The issue of low pensions is quite deep and requires national attention, maybe even government intervention to buttress social welfare.
I know there are a number of measures being taken by responsible bodies to first of all ascertain if the pension calculations from the Zimbabwe dollar to the US dollar were fair, he said.
The most any employee is paying in pension contributions at the moment is $6 per month, while the employer contributes a further $6.
NSSA uses a formula where the number of contribution years is multiplied by the individuals monthly insurable earnings multiplied by a factor of 1,333% to determine the pension level.
Tarusenga said any pension payable by NSSA should be as specified in the rule book of the NSSA pension fund and in terms of the NSSA Act.
This rule book should be available to every member of NSSA. This avoids inequitable unfair benefit payment. As far as I know, NSSA has no operational rule book for the pension fund, he said.
He added that when the fund was introduced in 1993, the pension payable on retirement, at a stipulated retirement age, was set as 1,33% of earnings at retirement multiplied by the number of years of service.
