NSSA to Extend Pension Coverage to Informal Sector and Diaspora

The National Social Security Authority (NSSA) is poised to broaden its pension coverage to encompass the informal sector by the close of the current year, with plans to include the Zimbabwean diaspora community in a subsequent phase.

Shepard Mperi, NSSA’s Director for Benefits, Actuarial and Schemes, indicated that the phased introduction of coverage for these two sectors is anticipated to yield greater savings compared to the Authority’s existing pension contributions from formal sector employees.

“We are now on the verge of accepting informal sector contributions (to the pension fund). We realised that the informal sector is huge and is not covered by social security,” Mperi stated. He further elaborated, “We have done thorough feasibility studies on this with technical assistance from the International Labour Organisation (ILO) and are benchmarking our cover against similar schemes in Ghana, Rwanda, Uganda, Uruguay and other countries in Latin America that we studied.”

Mperi estimated that the informal sector represents a market of over four million individuals requiring pension coverage, which is more than double the approximately 1.3 million formal sector workers currently covered by NSSA.

He highlighted that, once fully integrated, these two groups—the informal sector and the diaspora, also estimated to be in the millions—are expected to become a significant source of national development savings.

“We are now designing and costing various (pension) schemes that could be offered to the informal sector and diaspora, and we might roll out a pilot scheme at the end of the year,” Mr Mperi revealed.

The rollout will be executed in phases, with NSSA initially collaborating closely with informal sector business associations and financial institutions that already serve the diaspora. This approach aims to foster confidence and encourage participation.

The proposed schemes will offer diverse options, primarily based on affordability, and will incorporate incentives such as loans for contributors to enhance uptake.

Mperi concluded that the expanded pool of savings resulting from this initiative would bolster NSSA’s financial capacity, enabling it to contribute more substantially to national development projects, including infrastructure development (roads and dams), power generation, and housing provision.