‘EARLY ACCESS TO PENSIONS COULD INCREASE POVERTY’
Written by MRadio on March 31, 2022
By ADRIAN MWANZA
The proposed changes for early access to pensions before retirement by government could cause poverty in the country, former Labour and Social Security Minister Joyce Nonde Simukoko has said.
Ms Simukoko said the proposal by Government for the early access to benefits before retirement could subdue the sector and increase poverty in the country.
She said that most Zambians did not understand the importance of benefits and said that this would have negative implications if allowed.
She said that there was need for people to ensure that they worked hard whilst in employment to ensure that they do not suffer when they retired.
“What we should do is to have good conditions of service whilst we are working and utilise firms like Zambia National Building Society to get mortgages,” she said.
Meanwhile, Benefits Consulting Services (BENCON) indicated that there was need for stakeholder engagement on the proposal to allow citizens to access part of their pension before retirement.
BENCON Chief Executive Officer Bryson Hamanzuka warned that the proposal may have a profound negative effect on retirees and the local pension sector in general.
Mr Hamanzuka said if Government implemented this measure, it would spell doom for the pensions and retirement industry.
“This will have far reaching consequences on the social security conditions of citizens as people will be thrown into destitution and abject poverty in their old age. This country has no universal social security safety net except for the meagre and controversy plagued social cash transfer programme,’’ he said.
Mr Hamanzuka noted that despite membership being compulsory, the National Pension Scheme Authority (NAPSA), which had been in existence since 2000, did not provide a sufficient universal social security net hence the need for Zambia to build an independent pensions and retirement benefits industry.
He added that it was imperative for the country to learn from similar policies that had been made in the past with the overall impact on retirees’ long-term well-being being largely detrimental.
Meanwhile well-respected pension’s expert Steve Williams called on stakeholders to re-examine the nature, structure, and relevance of pension schemes in their current form to the average Zambian if the industry was to achieve long-term sustainability.
“The pensions in Zambia were effectively inherited from the colonial era, which adopted much the same rules and rationale for pension schemes that prevailed in the U.K. at that time,” he said
