Maravi

Govt’s failure to submit employees’ remittances worry ZFE

Govt’s failure to submit employees’ remittances worry ZFE
By Florence Bupe
Sun 24 Jan. 2010, 04:00 CAT

THE Zambia Federation of Employers (ZFE) has cited the government as the biggest culprit in failing to submit employee remittances to pension schemes.

Appearing before the Parliamentary Committee on Economic Affairs and Labour, ZFE executive director Harrington Chibanda said default rates in the public service were very high and needed to be addressed.

“The rate of default in the private sector in terms of contribution remittance to NAPSA (National Pensions Scheme Authority) is minimal but within the civil service and quasi government institutions, the default rate is very high,” Chibanda said.

He complained that there was interference from government whenever the Pensions and Insurance Authority (PIA) stepped in to address the problem.

“When NAPSA comes in, the powers that be step in and intervene. Whether such issues are followed up as they should be or not is not to our knowledge,” he said.

Chibanda appealed to members of parliament to ensure that the civil service leads by example by ensuring the social security of its workers is guaranteed.

And Chibanda disclosed that the pensions industry had recorded significant growth over the last year mainly as a result of new contributions.

“As at December 31,2008 the net assets for the pension industry was K1.8 trillion, while the latest figures as at September 31, 2009 reveal net assets for the pension industry was K2.065 trillion,” Chibanda explained. “PIA has attributed this increase to new contributions in the schemes and investment returns especially that the capacity markets have rebounded.”

Chibanda, however, said the current pension system in the country was making the cost of doing business high.

He said this had in many cases led to employers opting for casualisation to avoid huge pension schemes for their workers.

He called for a revision of the pension scheme policy in the country for enhanced social security.

Labels: HARRINGTON CHIBANDA, ZFE

posted by MrK @ 9:06 PM