1. SOCIAL PROTECTION FOR THE AGED
Contributory LEGAL PROVISIONS FOR THE AGED, COVERAGE AND REFORMS
SOCIAL PROTECTION WEEK
GOVERNMENT COMPLEX
29TH NOVEMBER 2017
JOSEPH BANDA
Social Security Department
Ministry of Labour and Social Security

2. OUTLINE CONTRIBUTORY LEGAL PROVISION FOR THE AGED
Objective of social security PROVISIONS FOR THE AGED
CONTRIBUTORY LEGAL PROVISION FOR THE AGED
COVERAGE AND FINANCING
PENSIONS REFORMS
Expected outcome of the reforms

3. Objective of social security PROVISIONS FOR THE AGED

4. Objective of social security PROVISIONS FOR THE AGED
The Social Security Programmes are financed through contributions (payroll deductions)
SS schemes are important institutional solutions to guarantee income security in old age;
Old-age pensions from mandatory public social insurance and/or voluntary occupational or other private pension schemes;
Income distribution and providing adequate benefits for minimum well-being and the fullfillment of basic needs;
Provides prevention measures and protection for individuals against life-course risks;

5. CONTRIBUTORY LEGAL PROVISION FOR THE AGED

6. CONTRIBUTORY LEGAL PROVISION FOR THE AGED
Contributory Social Security Schemes include;
NAPSA, National Pension Scheme Act no. 40 of 1996
LASF, Local Authorities Superannuation Fund Act Chapter 284
PSPF; the Public Service Pensions Act, Chapter 260
WCFCB; the Workers’ Compensation Act No. 10 of 1999 of the Laws of Zambia; and
Occupational Pension Schemes; the Pension Scheme Regulation Act, 1996

7. NATIONAL PENSION SCHEME AUTHORITY (NAPSA)
NAPSA is aDB scheme established in February 2000 by the NPS Act no. 40 of 1996 of the law of Zambia
Provide income security against the risk arising from retirement, death and invalidity
Provide a funeral grant The funeral grant is 10 times the minimum pension
Provide a minimum pension , ( 20% NAE applicable in that year)
Provide income replacement of 40% and benefits are indexed to changes in national average earnings (wage inflation)

8. PUBLIC SERVICE PENSION FUND (PSPF)
PSPF is established to provide pensions and other benefits for persons employed in the Public Service;
DB Pension scheme;
Members who exit the scheme through early retirement, on medical grounds, National Interest and deceased cases are paid through the Government;
A member who is eligible for full retirement benefits can elect to commute one-third or two-thirds;

9. LOCAL AUTHORITIES SUPERANNUATION FUND
LASF established to provide pensions and other benefits for employees of the local authorities and utility companies
Employer Members: Councils, ZESCO, NHA,LWSC, EWSC
LASF is a DB scheme
A member who is eligible for full retirement benefits can elect to commute one-third or two-thirds

10. WORKERS’ COMPENSATION FUND CONTROL BOARD (WCFCB)
WCFCB is a social security scheme establish under the Workers’ Compensation Act No. 10 of 1999;
The scheme covers employers in the public and private sector except the state ;
the scheme compensate workers for disability suffered or disease contracted during the course of employment and pay compensation to dependants of workers who die as a result of occupation accidents or disease ;
Employers liability;
Invest surplus fund to generate additional income to ensure the growth of the fund; and
Scheme provide benefits both cash and in kind benefits: lump sum, pension, rehab, medical items, back to work etc

11. Public Social Security Schemes (NAPSA/ LASF / WCFCB / PSPF)
CURRENT CONTRIBUTORY PROVISIONS
Voluntary
Individual
Plan
Personal savings
Voluntary
Occupational schemes
About 250 private in-house pension schemes
Regulated under PIA
Mandatory
Public Social Security Schemes (NAPSA/ LASF / WCFCB / PSPF)
4 Statutory schemes
Supervised by various ministries

12. COVERAGE AND FINANCING

13. COVERAGE AND FINANCING
SCHEME
Categories of employees
COVERAGE- ACTIVE MEMBERS
PENSIONERS
FINANCING
Female
Male
Total
NAPSA
Public and Private Employees
106,386
601,553
707,939
14,500
10%
PSPF
Public Service Employee
36,124
57,349
93,473
60,000
14.5%
LASF
Local Authorities and Utility Companies Employee
819
3,235
4,054
13,000
33%
239 OPS
Private and public X
80,216
18,567
8-33%
TOTAL
885,682
106,067
31st December 2015

14. REFORMS

15. OBJECTIVE OF THE REFORMS
Reforms are aimed at establishing a comprehensive and responsive social protection system that would:-
Adequately address the plight of workers, retirees, Pensioners and beneficiaries;
Address the long term financial sustainability of the social security system
Create a three tier pension system -
Introduce new benefits – MP
Provide legal framework to facilitate transition from informal to formal economy

16. REFORMS SOCIAL SECURITY- MULTI TIER SYSTEM
Establish a three tier Social Security System to provided a minimum income replacement Ratio (IRR) of 60%:-
Tier 1: Mandatory National Basic Scheme – NSSA providing 40% IRR (or More), Cover - Private and Public employees, DB scheme, no lump sum
Tier 2: Mandatory Occupational Pension schemes (MOPS) providing a minimum of 20% IRR - mixed DC and DB schemes, restructure LASF, PSPF into MOPS for public employees (10% lump sum)
Tier 3: Voluntary Private Pension Scheme – providing an additional minimum IRR of up to 20% (individual plans)
IRR is the percentage of working income that an individual would receive to maintain the same standard of living in retirement.
E.g. income K1,000 in retirement u will get K600/m

17. REFORMS IRR of 40% Mandatory, IRR of 20% Voluntary
VOLUNTARY TIER 3 - PRIVATE PLANS (20%)
PRIVATE RETIREMENT POLICIES
PERSONAL INVESTMENTS
MANDATORY TIER 2 - OCCUPATION PENSION SCHEMES (20% IRR)
PUBLIC OCCUPATION PENSION SCHEMES (PSPF AND LASF)
SINGLE/MULTI EMPLOYER PENSION SCHEMES (OPS)
MANDATORY TIER 1- UNIVERSAL BASIC SCHEMES
NATIONAL PENSION SCHEME (40% IRR)
EMPLOYMENT INJURY AND DISEASE (Employer Liability)

18. REFORMS Cont…. Revision of the retirement age:-
FOR employees employed BEFORE the enactment of a new law shall elect to retire on the following :-
Can retire in accordance with law before the amendment or retire at 60 years or retire at 65 years but with the employer’s approval
For employees employed AFTER the enactment of a new law the retirement age will be as follows :-
55 yearsEarly Retirement
60 YearsNormal Retirement Age
65 Years late retirement (employer’s spproval)

19. EXPECTED OUTCOMES OF THE REFORMS
Decent retirement benefits - Providing a minimum combined IRR of 60%;
Make parametric changes to make the SP system sustainable;
Introduction of Minimum Pension
Increase portability of benefits and Providing for annual pension indexation
Reducing the allowed share of accrued rights that could be taken as lump sum to half (10%) (meaningful monthly pension);
Embedding homeownership in the system;
Private sector participation in investment and management of public pension funds;

20. Public Social Security Schemes (NSSA/ LASF / WCFCB / PSPF)
CURRENT CONTRIBUTORY PROVISIONS
Voluntary
Individual
Plan
Personal savings
Mandatory
Occupational schemes
About 250 private in-house pension schemes
Regulated under SSIRA
Mandatory
Public Social Security Schemes (NSSA/ LASF / WCFCB / PSPF)
4 Statutory schemes
Regulated by SSIRA

21. THE END
THANK YOU