NSSA to review retirement age

THE National Social Security Authority (NSSA) says it is planning to increase retirement age up to 75 years to increase contribution periods and boost pay-outs to pensioners to counter a shrinking contributions base.

This comes as the NSSA contribution base is shrinking due to company closures which have been worsened by the coronavitus pandemic (Covid-19)

Speaking during a virtual media mentorship programme, Agnes Masiiwa, NSSA acting director in charge of contributions, collections and compliance said apart from increasing the retirement age, absorbing the informal sectors of the economy was another option which could boost the contribution base.

“Increasing the retirement age is one viable option to ensure meaningful social protection from a pensions and benefits scheme, whose contribution base and low compliance levels, are reflective of macroeconomic challenges,” she said.

“Potential contributors are migrating to lucrative bases negatively affecting financial viability in financing, this has a bearing on the benefit levels. Increasing contribution period can entail increasing retirement age from 70 to 75 years to ensure pensioners get meaningful benefits,” Masiiwa further said.

NSSA says its contribution base for pension benefits and accident compensation scheme was shrinking amid growing informalisation, which is being compounded by labour migration and replacement of human skill through technological advancement.

The provision of social protection is a critical indicator in the country’s efforts towards improved livelihoods and poverty alleviation, drawing inspiration from the global 2030 Sustainable Development Goals (SDGs) and International Labour Organisation (ILO) flagship programmes.

“There is poor compliance culture across businesses. The NSSA contribution base is shrinking and we have had company closures, persistent liquidity challenges, informalisation of the economy and active labour migration within the country and to other countries,” she said.

Masiiwa, said there are other challenges that have also contributed including technological advancement has resulted in loss of work  as well as a growing trend of “connivance” between employers and employees to evade payment of contributions.