By Dickson Jere
Finally, the reform of the National Pensions Scheme Authority or NAPSA is underway following the approval yesterday by President Hakainde Hichilema and his cabinet to amend the law governing the compulsory pension scheme in Zambia.
The “National Pensions Scheme Authority (Amendment) Bill of 2022” will allow NAPSA to grant waivers of penalties on delayed contributions, which was affecting most businesses in the country.
Currently, any delay in remitting the contributions to NAPSA attract huge penalties without looking at the cause of the delay and such remain as a huge liability on the books of many companies even after paying the principal amounts.
Unlike Zambia Revenue Authority (ZRA) which negotiates with defaulting taxpayers and can waive some penalties, NAPSA law did not allow them to talk or grant any waivers. This affected most companies especially during covid-19 pandemic when arrears accumulated but could not be waived even after paying the entire principal amounts.
The new law will “revise the penalty rate for delayed payment of contribution and provide for a waiver of penalties arising from the delayed payments…” the memorandum reads.
The news should cheer the business community who have been pushing for these far-reaching reforms of NAPSA.
The revised law will also allow an option to claim for “age benefits” by a member of the fund in line with President Hakainde Hichilema’s campaign promise to unbundle the pension scheme. After the amendments, you can partially access your pension without necessarily waiting to reach the retirement age.
Further, the new law will also provide for the closure of the National Provident Fund (NPF) accounts which are currently being administered by NAPSA.
It is argued that NPF accounts are a liability on the books of NAPSA but I am not sure whether all the beneficiaries of NPF have been paid their dues before this closure is made. Parliament will have to interrogate that aspect further.
