State-run pension fund, the National Social Security Authority (NSSA) has reviewed minimum monthly pension pay-outs to ZWL$3,000 with effect from 1 July 2021, in line with its strategy to peg minimum monthly pensions at the equivalent of US$60 by year end.
According to NSSA’s Deputy Director – Marketing and Communication, Tendai Mutseyekwa, prior to the latest increase, the minimum was pegged at the auction rate equivalent of US$25 (ZWL$2,100) and the plan was to increase it to at least US$30 in July, US$40 in October and US$60 by December.
“The last review was in April 2021, when we increased the minimum pay-out from the equivalent of US$12 to US$25. Our target was to increase to the equivalent of US$30 in July, but the ZWL$3,000 amounts to about US$35, which is US$5 above our target. The December target of US$60 was informed by ILO recommendations of a minimum daily income of US$2 for someone to survive in the southern Africa region.
“We have a clear roadmap on pension increases, but we are not stopping there as we have come up with various measures to augment the incomes of our beneficiaries.
“Next week we shall be launching a revolving fund to assist pensioners and beneficiaries who are interested in embarking on income generating projects.
“This is a micro finance facility that will have a tenure of 18 months with a token interest rate. The loans will initially be disbursed through NBS and POSB, with other banks to follow. NBS and POSB account for just over 70% of our beneficiaries so it made sense to start with them,” said Mutseyekwa.
In addition, plans for a goat farming out grower scheme that will be based in Kwekwe are at an advanced stage, with a model project set to be unveiled in Bindura.
“The Bindura project is meant to be a centre of excellence for those aspiring to venture into goat farming. We are not just looking at providing seed for farmers, but technical assistance and marketing opportunities. NSSA has secured a market in the Middle East where goat meat is in high demand.
“Those who participate in our Boer goat farming venture will be able to tap into this by marketing their produce via NSSA and will receive their proceeds in foreign currency.”
Mutseyekwa said while NSSA’s mandate was to provide social security through the payment of benefits as prescribed by the NSSA Act, the Authority saw it fit to extend into social security by offering additional benefits to assist its members and Zimbabweans in general weather economic hardships.
NSSA was created to coexist with occupational pension funds, that is why NSSA deductions are capped well below those of other pension schemes. NSSA’s contribution rate is currently 9%, split equally between employee and employer.
The 9% is not levied on one’s entire salary but is capped at a pensionable salary that is presently ZWL$22,406.
“Following the promulgation of Statutory Instrument 169 of 2021 pertaining to the contribution rates to NSSA schemes, the insurable salary cap is now pegged at 75% of the Total Consumption Poverty Line for an average of five persons per household. This self-adjusting mechanism enhances NSSA’s ability to be more responsive when it comes to reviewing benefits,” said Mutseyekwa.