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Two Pension Funds Under Threat
By Times Reporter, Times of Zambia
August 26, 2004
The World Bank and the Zambia Congress of Trade Unions (ZCTU) have said the existence of the Public Service Pensions Fund (PSPF) and the Local Authorities Superannuation Fund (LASF) is threatened because of a drastic loss of membership.
World Bank economist, Aniruddha Bonnerjee attributed the development to the creation of the National Pension Scheme Authority (NAPSA) in 2000.
The bank official was speaking at the three-day social security national conference which ended in Lusaka yesterday.
The NAPSA Act states that all new civil service employees except for teachers and security personnel would affiliate to NAPSA as of February 2000.
Mr Bonnerjee noted that the PSPF and LASF would no longer receive revenue once the youngest member who joined prior to February 2000 retired.
Mr Bonnerjee said that the PSPF's active membership was declining at the rate of about 4,000 annually.
He said that there was need for careful coordination between NAPSA, PSPF and LASF and that if the two were to be phased out, Government should ensure that the backlog of problems affecting the two funds was not transferred to NAPSA.
ZCTU general secretary Sylvester Tembo expressed similar concerns over the dwindling membership of the two institutions and urged Government to take a bold step in resolving the matter.
Mr Tembo said Government should pay those that would be affected after the closure of the two, while administrative personnel should be taken over by NAPSA.
Mr Tembo said there was need to correct the abuse of pension funds by management in the various institutions and called for urgent intervention.
International Social Security Association (ISSA) representative from the United Kingdom Warren McGillivray in a paper on investment in social schemes, said public pension funds needed to have improved investment techniques in order to make profit.
Mr McGillivray called for a free board of management to run the institutions and make decisions free from political interference but emphasised the need for consultation with Government in embarking in investment.
He said the boards should maintain high levels of financial sustainability of the scheme and should perform transparently.
Contributing on political interference, Federation of Free Trade Unions of Zambia (FFTUZ) chairperson Joyce Nonde accused Government of politically interfering in the affairs of the public pension funds.
Ms Nonde, through her vice -president Teza Nchiinga, said political interference had led to Government owing PSPF K3 trillion.
Offshore investments by the funds were negative to the local economy and encouraged them to invest locally.
And closing the conference, Labour and Social Security Permanent Secretary Josephine Mapoma said the conference had been a milestone in improving the social security system in Zambia.
Ms Mapoma observed that urgent issues such as the developments relating to PSPF and the minimum wage that was being tackled by the labour tripartite council would be resolved soon.
She said the draft social security vision document would be finalised before the end of the year, while the details of who would be incorporated from technical committees that would follow after the closure of the conference would also be announced soon.
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