The Sunday Mail
Pensioners are among those hardest hit by economic hardships occasioned by the Covid-19 pandemic. Over the years, the National Social Security Authority (NSSA), the statutory body charged with providing social security, has struggled to pay meaningful benefits to pensioners further compounding the despair. The Sunday Mail’s Harmony Agere (HA) spoke to NSSA board chairperson Dr Percy Toriro(pt) who outlined the organisation’s plan to improve pensioners’ welfare this year.
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HA: What are NSSA’s main targets going into 2022?
PT: The main NSSA targets for 2022 are guided by its strategy and also benchmarked on the Government economic blueprint the National Development Strategy 1 (NDS1). As a State-Owned Enterprise, we contribute to Vision 2030.
Specifically, the following will guide our activities: firstly we want to see improved sustainability of social protection schemes; secondly, these schemes must have an improved coverage with improved member benefits; thirdly, we are working towards reduced occupational accidents and diseases; fourthly, we target to operate within an improved corporate governance framework; and lastly and more importantly, NSSA is targeting to put resources in high impact investments that will benefit our members as well as contribute to national development.
HA: As the board chairperson, can you outline your vision for the organisation and how plan to implement it?
PT: The vision for NSSA as per its strategy is: “To be a world class provider of social security by 2030”.
This again is in line with the country’s vision wherein we want to benchmark ourselves with the highest standards internationally.
For me as leader of the organisation, and I share this with the board and staff, I want us to clean up uncomfortable legacy issues so that we continue to gain public confidence.
I also want to work towards continuously improving NSSA so that it becomes an ethical and high-performing public entity that is a responsible steward in managing the national social protection scheme.
HA: For years, NSSA has reportedly struggled with ghost pension accounts. Over the last year, how many such accounts did you identify and close?
PT: We have embarked on a clean-up exercise. You may have noticed that we administered life certificates targeting 210 551 beneficiaries.
Of these 182 720 responded by completing the relevant documents.
Those who did not respond had their pensions suspended pending verification of their existence. It is work in progress and the team is working hard to come up with a reliable member database.
HA: What measure have you taken to improve pensioners’ income in light of current inflationary pressures?
PT: NSSA has come up with a cocktail of measures to improve the pensioners’ welfare. Firstly, we made quarterly adjustments to monthly premiums and target to pay the equivalent of US$60 by January 2022.
In partnership with retail operators, we have introduced discounted groceries for pensioners in partnership with Spar Supermarkets, OK and Bon Marche. We continue to approach other retailers to broaden this arrangement. We are also rolling out revolving loan facilities for members including income-generating projects for members that may still wish to get involved.
We also introduced zero-rated bank charges for pensioners, currently with POSB and NBS, whilst negotiations with other banks are underway.
HA: Millions of Zimbabweans are working in the informal sector. What measures have you taken to ensure that they are covered under some of your schemes?
PT: NSSA currently offer products for the formal sector but is working on introducing a scheme for the informal sector. This requires us to fully understand the market and how this has been done elsewhere. We are, therefore, working in collaboration and with the assistance of the International Labour Organisation.
HA: What are some of the major projects that you plan to embark on this year to expand your asset portfolio?
PT: Some of the projects we are embarking on this year include:
Agro Value Chains – We realise that agriculture is a stimulator of economic development but to a great extent Zimbabwe currently does little beneficiation of its raw produce and hence there are big economic opportunities in value addition.
We will be investing more in the agro value chain processes to get higher returns and contribute to value-addition in this sector.
We are also investing in alternative energy solutions that contribute to the power generation. Zimbabwe has a huge power generation deficit.
All the asset classes that the authority invests in and can possibly invest in will not perform optimally if the power issue is not rectified.
It is also an area that guarantees a good return on investment.
In December, there was a ground-breaking ceremony of the Mt Hampden power station.
This year the expansion of the solar power station from 2,5 to 25 megawatts will be implemented.
We will also invest in infrastructure projects, which will see the authority sweating some of its land banks and get into mutually beneficial relationships with like-minded investment entities.
Throughout the year we will be coming back to our various stakeholders to share details of the different projects.
HA: Cumulatively, how much are you looking to invest?
PT: Our mandate is to invest the excess of contributions over pay-outs.
Currently, the authority has been increasing the benefits paid to the pensioners and our actuarial scientists will professionally advise on the delicate balance between pay-outs and investments.
As we roll out different projects, the amounts invested will be revealed.
For a few projects, our technical teams are seized with the designs and costing.
NSSA is also open to syndication and financing partnerships to attain real returns to grow the reserves of the scheme sustainably.
In all our projects, we also ensure environmental and social compliance as well as gender-mainstreaming as we believe these are essential blocks to sustainable development.
HA: How much, in terms of loans for income-generating projects, has been disbursed to pensioners under your arrangement with POSB and NBS?
PT: We have so far disbursed $126 495 000.
HA: NSSA has in recent years disposed of some assets; is the authority adopting a new strategy in terms of investment going into the future?
PT: This narrative is not entirely correct.
NSSA was a significant investor in four insurance companies, Nicoz Diamond, Fidelity, First Mutual Holdings Limited (FMHL) and ZHL.
In 2017, NSSA made a strategic decision to consolidate its investment in the insurance sector with the first phase involving the merger of Nicoz Diamond into FMHL.
This process was completed in 2017 and resulted in NSSA increasing its shareholding to 66,23 percent.
NSSA then initiated its second phase of consolidation in the second half of 2020 which saw NSSA swap its 35,09 percent stake in Fidelity for additional shareholding in ZHL.
NSSA also supported the consolidation of Zimre Properties Investments (ZPI) back into ZHL as part of ZHL’s reconsolidation of its former subsidiaries.
We swapped our 5,9 million shares in ZPI for additional shares in ZHL boosting our shareholding to 18,03 percent, to further solidify NSSA’s shareholding in ZHL and benefit from the strategic initiatives of the company.
The goal for these strategic initiatives is to create a dominant investment that is financially stable and thus able to create shareholder value and consistently pay sustainable dividends for the benefit of pensioners in support of NSSA’s mandate.
In January 2021, NSSA commenced initiatives to implement phase three of the insurance cluster consolidation strategy which involves reducing its stake in FMHL through offloading up to 31,22 percent stake to a strategic partner.
This strategic move will see NSSA keep a majority shareholding at 35 percent in compliance with Zimbabwe Stock Exchange (ZSE) and Insurance and Pensions Commission (IPEC) requirements, while bringing in a strategic investor with solid financial resources, synergistic, technical, and strategic benefits to catapult First Mutual into a regional insurance powerhouse.
This accurately explains our strategy.
HA: Has NSSA sanctioned any companies for failing to remit workers’ contributions?
PT: Certainly yes. As part of our day-to-day enforcement measures, we do come across some errant employers who we end up sanctioning in terms of the law in order to bring them to comply.
Section 3A of the NSSA Act (17:04) gives an obligation to all employers of labour a duty to comply with all NSSA schemes.
The same Act empowers NSSA to compulsorily register employers unwilling to register, to effect surcharges and penalties on all overdue amounts and to further garnish any of the employer’s agents as defined by the NSSA Act, where soft methods of debt recovery fail, but this is usually used as a last resort.
Our applied sanctions are tilted towards assisting employers to comply to ensure that all workers are covered under the Pension and Other Benefits Scheme as well as the Accident Prevention and Workers Compensation Scheme.
However, notwithstanding the above measures, we also enter into payment plans with employers as we are alive to what is happening in the economy and we strongly believe in engagement.
We have structured some relief for companies adversely affected by the Covid-19 pandemic and the relief has been ongoing since the outbreak last year.
HA: How are pensioners being protected against the negative effects of Covid-19?
PT: NSSA is making timely payment of pensions across all banks for easy access by pensioners.
We are also adopting the use of modern technologies such as Twitter, Facebook and WhatsApp to disseminate information to pensioners and assist them through these platforms.
We are also decentralising our offices.
In addition to the six regional offices, we now operate 11 sub-offices as well as 16 satellite offices.
We also decentralised the issuance of life certificates exercises by deploying our officers to villages, growth points and shopping centres, closer to pensioners as we avoided gathering pensioners at our main office.
