NSSA boss speaks on crisis, negligible pension deductions

On the Special Edition of The Platform on ZiFM Stereo, host Supa Mandiwanzira spoke with Dr. Charles Shava, Acting General Manager of the National Social Security Authority (NSSA), about the investments the State-owned pension scheme made, the plight of the pensioners, and other problems and potential solutions.

Below are excerpts of the interview:

 

SM: You have been acting in that position for too long, you should win an Oscar, you are a good actor. Almost two years later, you are still acting.

 

CS: Yes, l am still acting and it has been a journey.

 

SM: Does it limit you in terms of the decision that you make while you are acting?

 

CS:  Of course, in theory you can take all the decisions that you wish but practically you are acting (and) there are certain things that you may not find easy to make decisions on. Some things can’t get easily accepted because people think you are just acting but by and large you have all the substantive authority to take all the decisions that you wish. The issue is if anything goes right or if anything goes wrong they won’t say you are acting, they say you are the CEO.

 

SM: Things have sort of quietened at NSSA since you took over. There was a lot of drama and a lot of controversies. How have you managed to stabilize the organization?

 

CS: It has not been easy but what we have just decided to do is just to do the right thing. We are a mobilizer of funds and naturally the controversies rotate around the misuse of public funds. If the public think you are abusing them, you will have a problem. What we tried to make sure is that the contribution of funds is used judicially as per the prescription of the Act.

 

SM: Can we briefly talk about the Act, what it talks about, the investments, where you should put the money other than taking care of the pensioners?

 

CS: Let me give you a brief background about NSSA. A lot of people don’t know what this animal called NSSA is all about. NSSA is a creature of statute by NSSA Act Chapter 1704 so it gives the authority power through the to create social security schemes. Currently as NSSA we are running two schemes, the first one is called “The Pensions and Other Benefits Scheme” which basically refers to the pensions scheme and the other one “The Accident Prevention and Workman Compensation.” So this schemes are done by pensioners and both the employees and employers as well as the accident and prevention and compensation scheme, it’s only the employers.

What we invest in is clearly prescribed in the Act. We invest in surplus to our operations, so what is key to our operations under the pensioners and benefits scheme is to pay pensioners adequately a reasonable amount of money as prescribed by the Act. When we budget and we realize we have surplus, it is the surplus that we invest. So we do not always have money to invest. Most of our investments do not take off because actually we don’t have money.

 

SM: You can’t say you don’t have the money when people look at their salaries or their pay slips they see some deductions have gone to NSSA so they don’t believe you don’t  have the money, they believe you abuse the money. Perhaps this is the platform for you to explain to people what happens to the money. Give us some numbers. How much do you collect, how much do you pay the pensioners, how much do you invest and how much for administration.?

 

CS: What do we collect? If l challenge you now to look at your pay slip and see how much we deduct you would realize it is almost negligible, you possibly don’t even look at it.

 

SM:  It’s very little but small amount that you collect from everyone. It becomes a bigger amount.

 

CS: Yes, it becomes a bigger amount but it almost has become a liability. For instance, now we have almost around 250 000 pensioners from those contributions. Our contributions are not only your basic salary they are on a cap, the cap is about 300 dollars so if you are earning 15 000 you can only contribute to about 300 dollars. That amount is small.

The amount that we collect every month plus any income from investments is the amount that we pay the current pensioner.

 

SM: We have a lot of people retiring and given the unemployment in the country, you may not have new people on payroll to pay for the fund. How do you balance the mathematics?

 

CS: That is the challenge. We have about 1 300m contributors to the scheme and we had about 1 800m contributors and these are people who were contributing before and for one reason or the other they stopped but we still have the liability because when they get to 60 (years) they still want their money from us.

We have a decrease in the number of people who are contributing to a pensioner, so what it means is we may either have to deduct more from the few contributors or otherwise we may not be able to meet our obligations.

 

SM: What are your solutions to this problem?

 

CS: What we are trying to do are very prudent investments. As l say now what we pay part of it comes from investments. We need to improve our investments strongly.

 

SM: I thought you said you do not have any spare money to invest?

 

CS: We invest surplus but surplus is not always enough. Not that we do not have money available completely, we are running some projects. For the past two years we have pushed our income to about 4 percent per total income to now it’s about 12 percent, which is a big leap. In monetary terms, we had about US$2m and now we have about US$20m from investments.

 

SM: It appears from the amounts that you are paying pensioners is really practicing tokenism. It is not even enough to look after the pensioner for a week.

 

CS: Yes, that is exactly how it is structured.

 

SM: Why has it been structured like that when someone has been contributing to a better part of their working life?

 

CS: The pension that we give is a social security pension, it’s not their pension. Their pension is an occupational pension which we all contribute to. What we collect from you and why it is very small and what we pay you is supposed to be some sort of top up to your pension and we call it a safety net. It must just supplement your main pension.

The problem we have in this country is that major and l would say almost all pensions have collapsed, no pension available is giving anything reasonable.

Despite the lowest contributions that we get on a gap from the contributors we are paying the highest pension in the country as NSSA better than Old Mutual or any you may think of.

 

To be continued next week…

 

Related