Zambia

December 13, 2006

For thousands of Zambia's former civil servants, retirement is beginning to seem less like the reward for a lifetime of work than a battle to survive, as they wait in vain for the lump sum and monthly pension payouts to which government workers are entitled.

Just ask Subulwa Nawa, 67, from the village of Nayanga in Western Province. Four years after retiring as a court messenger, a position he held for 20 years, Nawa is still waiting for his lump sum payout. 

"If I was given my benefits, I was going to buy nets and boats to start a fishing business, but I can't even plan because I don't know when I am going to get my money," he said. The future put on hold, everyday life has also been a struggle for Nawa, who has been scrounging to support his wife and nine children. 

The situation is even worse for 58-year-old Mutukwa Sililo, a retired police officer from Lukulu, also in the Western Province, who spent 25 years on the job: he too is still waiting for his benefits. 

"Each time I go there (the Public Service Pensions Fund Board, PSPF), they say 'Come tomorrow.' I have been reduced to a beggar," he told IPS. 

Sililo is one of many who spend nights at bus stops and the railway station in Zambia's capital, Lusaka, while trying to get their pensions paid out. 

The PSPF says it cannot meet its commitments in large part because of government borrowing from the organisation between 1974 and 1991. 

These loans were taken out at low interest rates over generous repayment periods, meaning that pension funds earned less than they would have done if invested elsewhere. 

"They (government) structured the loans in such a way that favoured government," said PSPF spokesman Mwenya Mwape, noting that the loans -- while repaid -- have nonetheless amounted to a loss on the part of the fund: "As you know, pension schemes thrive on investment." 

The PSPF has also come under strain as a result of the increasing number of government workers who are taking early retirement under the Public Service Reform Programme (PSRP), started by government in 1999 (the official retirement age in Zambia is 55). 

The PSRP is a government- and donor-funded initiative that focuses on restructuring the civil service. 

"While funds for lump sum pension benefits have usually been provided for by the employer, funds for monthly pensions have not. Consequently, the PSPF has had to foot the enormous monthly pension bill for such early retirees, beyond its financial and operational capacity," Mwenya told IPS. 

The failure of pension fund members to honour pension contributions has further aggravated matters, as has a declining membership base: with more pensioners relying on ever fewer contributors to fund their retirement, there is even less money to go around. 

Since 2000, there has been a law barring new entrants into the PSPF. Civil service employees now make contributions to the National Pension Scheme Authority -- formerly the Zambia National Provident Fund -- in line with efforts to streamline pension arrangements to have one national pension scheme. 

Government is also lagging behind in contributions it is expected to make to the PSPF. 

As a result of these and other factors, pension arrears have soared. Mwenya puts the arrears at almost 108 million dollars as of September this year -- while the total number of processed but outstanding pension claims was over 3,000. IPS was unable to get figures for the number of claims still to be processed: "To arrive at the number of unprocessed and outstanding claims is a tall order. That information is not readily available," said Mwenya. 

The Zambia National Pensioners Association, which represents pensioners from the public service, says government needs to act decisively to address the problems faced by its members. 

According to Mwenya, the cure "for the plight of retirees and pensioners is a comprehensive reform of the PSPF regulatory framework, in addition to settlement of all the debt owed to the PSPF -- at once, not piecemeal." 

"Any other approach to tackling the plight of retirees and pensioners would be akin to concentrating on treating a fever in a malaria patient instead of eradicating the parasite." 

While Finance and National Planning Minister Ngandu Magande acknowledges the desperation of many pensioners, he maintains that government workers should not look to the PSPF alone to finance them during retirement. 

"People should be a little more judicious with their lives. I think it is education which is lacking," he noted. 

There is no initiative in place at the moment to educate public servants about retirement planning. But, Magande says government did introduced the 'Future Search' programme when privatisation of certain public agencies started in 1992, to prepare workers for life after the civil service by giving them business skills. 

Complications may ensue even for those who do receive payments, as Kashiwa Chisanga can attest. 

The 67-year-old retired from the Zambia National Service (ZNS) in 1989 on medical grounds after dislocating his hip. (The ZNS is largely involved in agricultural production and land clearing.) 

Now a small-scale farmer, Chisanga says he "knew someone" at the Ministry of Finance and National Planning who was able to ensure that he received his lump sum pension payout. "I managed to get my lump sum in time because I was known. There is a lot of nepotism in moving files for benefits," he admits. 

However, Chisanga's monthly payments dried up in November last year after he moved between towns in northern Zambia. Because of a bureaucratic snag, the state has failed to register that his payments must now be issued in Kapiri Mposhi, some 200 kilometres from Lusaka. 

He has been staying with relatives in the capital for several weeks while trying to rectify his situation, and fears he is becoming a burden to them. 

"This pension problem is a huge one. People have complained but the state doesn't seem to take action," said Chisanga, who takes care of 10 orphans. 

"I am a medical retiree but the state is not giving me anything. I am a state reject." 

Elsewhere in Southern Africa, more positive news about solving the problems related to pensions is emerging. Two years ago, authorities in Lesotho introduced a pension scheme which provides citizens over 70 with a payout of about 20 dollars each month (see: 'DEVELOPMENT-LESOTHO: Pension System Works, Despite IMF Scepticism'). This system has provided much-needed relief to many.

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