Pensioners, workers cry over NSSA remittances
Saturday, 06 November 2010 20:46
Pensioners and workers, who have entrusted all their life savings with the
National Social Security Authority (NSSA), say they have now been made
destitute by the organisation which pays them starvation remittances every
month and does not adequately cater for those injured while at work.
Until about two decades ago, going into retirement was a thing that would
stimulate joyous moments for any worker.
Then, pensioners were assured of a hefty retirement package and an equally
dignified monthly payout enough to live on for the rest of their lives and
those of their dependants.
But those were the old good days.
Pensioners, who are getting their monthly payouts from NSSA, said they have
virtually been turned into paupers despite making huge contributions to the
body for several decades.
To them NSSA, created in 1989 to administer the country’s social security
programmes, is ripping them off by giving paltry monthly payouts.
Sixty-four-year-old pensioner, Naison Phiri of Rugare in Harare, said the
national social security authority was pushing him into destitution as the
money he was being paid was far short of what a person needed to survive on
per month.
“Very soon most pensioners, including myself, will be roaming the streets as
destitutes,” said Phiri, who is getting $25 per month as pension.
“And yet NSSA has bought a lot of assets and their managers are living in
good houses and driving flashy cars. They have misplaced priorities.”
Phiri said he has not been able to pay for water and electricity charges for
several months now and both the Harare City Council and the Zimbabwe
Electricity Supply Authority are threatening to disconnect service.
From that $25 payout, Phiri said he is also supposed to buy food, clothing,
medication as well as fees for his two children in high school.
This is compounded by the fact that his paltry payout is deposited into his
People’s Own Savings Bank (POSB) account, where it is further “eaten up” in
bank charges leaving him poorer.
His situation is a similar to that of all pensioners in the country. Another
pensioner, who stays in Mukumbura in Mashonaland Central province, said he
travels to his nearest post office in Mt Darwin, over 100 km away, to get
his pension.
For transport to and from Mt Darwin, he uses $10, meaning that he will only
be able to take home about $12 a month when bank charges are deducted from
his pension payout.
“I now go to withdraw my money after every two or three months but surviving
those months is like living in hell,” said the pensioner, who requested
anonymity saying he still had some “papers” being processed at NSSA.
“I don’t think I would urge people to contribute towards NSSA because they
will never benefit,” he said “The only problem is that it is compulsory.”
Due to the poor payouts, most pensioners who are still able-bodied have
returned to work while others are looking for jobs to supplement their
income. But with unemployment topping 80 percent, very few have been able to
get employed. Desperation forces those that get jobs to accept and live on
pathetic salaries.
NSSA statistics indicate that as of August this year, there were 226 777
pensioners who were being paid $25 a month while surviviving spouses’
pension and children’s allowances were both $10 each.
This means most pensioners are surviving on less than a quarter dollar a
day.
Lovemore Matombo (pictured), president of the Zimbabwe Congress of Trade
Unions (ZCTU), the country’s largest labour representative body, said NSSA
was short-changing pensioners by paying them “peanuts’.
He urged the authority to review the amount upwards to ensure that
pensioners get enough money to survive on.
“We have made our opinion about the urgent need to review that amount but
nothing has happened,” said Matombo. “NSSA is under-utilising its mandate.
They are behaving like a commercial entity instead of a social protection
authority.”
Even NSSA officials who spoke to The Standard last week said the huge
amounts they raised on a monthly basis makes a mockery of what they pay out
to the pensioners.
According to NSSA statistics, the authority is grossing about US$9 million
per month from members’ contributions and premiums. Out of that amount, it
is paying a paltry US$2 million to pensioners and U$630 000 towards workers’
compensation insurance scheme. “Most of the revenue goes to salaries and
benefits of the executives here who are sitting pretty when the pensioners
are wallowing in abject poverty,” said one official.
Junior managers at NSSA, said the official, get a minimum gross salary of
U$3 000 per month plus benefits such as a company car, fuel, school fees for
their children as well as housing loans. There is an option of buying the
car after every three years at “residual” value.
“As I speak, those with at least 10 years with the company have two or more
vehicles they bought for a song from the authority but pensioners are dying
in poverty,” said the official. “Some don’t even claim their pensions
because the paperwork is cumbersome.”
Pensioners complained that NSSA’s huge investments in properties, money
market and equity were only benefiting the organisation’s workers through
obscene salaries and perks while the supposed beneficiaries were wallowing
in abject poverty.
As of August this year, NSSA’s investment portfolio (national pension scheme
and the workers’ compensation insurance scheme portfolio) amounted to U$349,
9 million while the organisation’s money market exposure totalled U$97,1
million during the same period.
NSSA owns office blocks, shopping malls, factory shells, hospitals and other
related properties and rentals are a significant contributor to the
authority’s revenue.
Properties the authorities bought in the past year include Dominion House,
Ballantyne Park, Emay, Linhro buildings in Harare, among others.
NSSA General Manager James Matiza conceded that payouts to pensioners were
low but added the authority was in the process of getting International
Labour Organisation-sponsored actuarists to work out the possible margin of
increase.
He said NSSA wanted to increase minimum payouts to $40 last year but was
advised against that fearing the scheme would collapse.
“The money we are collecting is not for the current pensioners but for those
currently in employment and if we use all the money we will not be able to
pay those workers contributing at the moment,” said Matiza. “It’s not money
for today but for the future.”
Matiza said the amount of payouts depended on one’s contribution during his
or her working years. For example, while NSSA was paying a minimum of US$25
there were other pensioners who are getting as much as $1 447 per month.
“You cannot expect a farm worker who earns $30 monthly to get the same
pension with a person who was earning $6 000 per month,” he said.
Matiza also attributed the low payouts to low contribution rates by workers
as compared to other countries.
For example, while Zimbabwe’s contribution rate is 6 percent, countries like
Egypt and France have 40 percent and 45,04 percent contribution rates
respectively, meaning that their pensioners get more money, he said.
But a recent adverse audit report on NSSA by the comptroller and
auditor-general which unearthed a number of anomalies in the manner
properties were bought, the way tenders were offered, loans were extended to
board members and the lack of a comprehensive risk assessment at the
authority pours cold water on Matiza’s defence.
The report, released recently and which covered the period between December
2009 and March 2010, said huge loans were extended to board members in
unclear circumstances.
“Loans amounting to over US$3 million were accessed by two companies that
were under the directorship of one of the board members who was also the
chairman of the risk and investments committee,” says the report.
In some cases, says the report, shares were bought at prices lower than
quoted on the national stock exchange.
In one instance, the authority suffered a loss of U$1,6 million.
The report noted that during that period deals were structured with
unregistered companies, a move which could have prejudiced the authority of
millions of dollars.
In most cases, says the report, NSSA contracted companies in which it had
shares to provide services further exposing the authority to risks. For
example, it contracted Africom to provide telecommunications services and
yet it has 20 percent shares in the same company.
“… there is risk that related party transactions may result in the transfer
of undocumented resources and services and even obligations between
parties,” says the report. “There is also risk that significant volume of
finance may be chanelled towards entities that are only related to the
authority even if the transaction is not profitable.”
However, Matiza dismissed most of the issues raised in the adverse report.
He said the assertion that NSSA bought property which was not authorised by
the board committee was incorrect.
BY CAIPHAS CHIMHETE