NSSA pay-out increases to do little for pensioners
Pay-outs still below the Poverty Datum Line for self-sustaining individual and Total Consumption Poverty Line for an individual
BY Donald Chidoori
The National Social Security Authority (NSSA) Board Chairperson Robin Vela was pleased to announce that NSSA had increased the minimum pay-outs by 33,333 percent, but the recipients of the pay-outs would not be as pleased as the increase will do little for the pensioners.
Pensioners are currently receiving minimum monthly pension pay outs of $60, which will be increased to $80 from October this year.
“I am pleased to report that consistent with this promise, the board approved a 33,33 percent increase in the minimum retirement pension from $60 to $80 per month effective 1 October 2017,” Vela said.
This increase while welcome, is too little and will not enable a pensioner, his/her spouse to buy food, clothes and other needs, let alone buy any goodies for their grandchildren.
Mr Vela said the increase was consistent with their promise, but to a very little extent. In May this year Public Service, Labour and Social Services Minister Prisca Mupfumira said that, NSSA would raise pay-outs from the current $60 per month to $100 by September and eventually $150 by year-end.
“We want to give pensioners a liveable pension and we are in the process of doing that. By September we should have increased payouts to not less than $100 then to $150 by December,” Mupfumira promised.
This increase could have gone a long way in cushioning the pensioners, but NSSA had to settle for an actuarial approved $80 payout.
According to Zimstat, Zimbabwe’s poverty datum line stands between $430 and $574 for an average household of 5 and $96 for a self-sustaining individual, depending on location. So even if a pensioner was staying alone and had no other beneficiaries the meagre $80 would not even be able to take them through the month. For a person living outside the major cities and towns that amount can be wiped by bus fare and related travel expenses alone.
The cost of living, as measured by the Consumer Council of Zimbabwe’s low income urban earner monthly basket for a family of six is $577,77. The food basket costs alone are $132,06. It is no secret in Zimbabwe that most pensioners live and take care of their grandchildren and have limited alternative sources of funding. And these pensioners are expected to foot a food bill of $132,06 with a meagre $80.
The latest available data from the World Bank, show that 72 percent of the population in Zimbabwe lives below the poverty lines. The figures also show that the total consumption poverty line (TCPL) for Zimbabwe stands at $97,31 per person. The Food Poverty Line (FPL) for one person stands at $30,86 per month. The FPL for an average of a family of five stands at $154,32 per month.
The FPL which is at $1,03 a day represents the minimum consumption expenditure necessary to ensure that each household member can (if all expenditures were devoted to food alone) consume a minimum food basket representing 2 100 calories.
After toiling for many years retirement from formal employment should be a moment every worker looks forward to. However the meagre $60 have led people to work beyond their retirement age, resulting in many of the younger people to be left without any job opportunities.
Government offices, universities, and even the security forces are littered with people who are working way beyond their retirement age. Because they cannot entertain the idea of being a pensioner.
Being a Pensioner was once a crowning moment for a worker, a huge achievement which was taken with much pride. The meagre NSSA pay-outs of $80 have forced pensioners to live from hand to mouth.
Over the years NSSA has lost millions of dollars that could have benefited pensioners in risky and shady deals. The fund recorded a jump of over 200 percent in net profit to $116,8 million for the year ended December 2016. NSSA should make sure that this money is invested in profit making entities, as this will enable the fund to create enough revenue to increase payouts to pensioners.
NSSA collects employee contributions every month and invests them in property, money markets, long and short term investments in associated subsidiaries as well as in land.
All being said the Vela led board has thus far managed to make some strides in improving pensioner welfare. From April 1, 2017 a Funeral enhancement benefit valued at $500 was given to all pensioners in addition to the existing funeral grant of $300 as part of measures to deliver value to pensioners. Addressing the media in May this year, NSSA Chairperson Mr Robin Vela referring to the funeral enhancement benefit said that, “We believe that pensioners deserve a more decent burial than can be afforded under the current plan.”
It has now reached a time Board Chair Vela and NSSA start to believe that pensioners deserve to have a decent life before they are accorded a decent burial.