Saturday, April 20, 2024

NAPSA opposed to lump sum pay outs

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The National Pensions Scheme Authority has supported ongoing pensions reforms aimed at doing away with lump sum payments for retirees.

NAPSA Director General Charles Mpundu said the pensions authority is in support of calls to stop lump sum pay out for retirees.

Mr Mpundu said NAPSA would prefer offering monthly pension benefits as opposed to paying lump sums.

“These calls are welcome, infact if you examined our structure as NAPSA who will see that we are a pensions scheme and we are supposed to pay pensions benefits and not lump sums,” Mr Mpundu said.

He said, “These reforms are important as they will streamline the social security sector in this country. Am surprised that the ZCTU President Leonard Hikaumba is opposed to this and yet the unions have been part of the consultations about these reforms.”

Mr Mpundu was speaking in Lusaka Sunday evening when he featured on a live Sunday Interview programme on ZNBC TV.

“It is important for the nation to understand that NAPSA is a basic tier type of pension scheme, we aim to provide the floor in terms of pension benefits, there are two other types of pension scheme such as the second which is usually occupational or employee benefit schemes and third year which is normally voluntary,” he said.

He added, “It therefore becomes very difficult for a pensions scheme like ours to start paying out lump sums, although we do it currently off course with some eligibility options but we would like to operate primarily as a pension benefits scheme.

Mr Mpundu also dismissed suggestions that lump sum pay out enable retirees to invest their money in meaningful investment options such as housing.

“I don’t believe that somebody should be buying his/her first house at 55 upon retirement. We need to cultivate a culture of saving in this country, we seem to be drifting towards a highly consumptive society which is worrying. You don’t need to build a house through NAPSA benefits, these are benefits meant to sustain you in your retirement through monthly pay out and not lump sum,” he said.

Mr Mpundu also announced that NAPSA will next year revise upwards the minimum monthly payments given out to pensioners.

“We took cognizant of inflation and other factors, currently we are paying K 689 but we are increasing to just over K 800 in the new year. We have beaten the minimum wage and we are always looking at ways in which we could provide a better service,” Mr Mpundu said.

On investments, Mr Mpundu said NAPSA has a well-diversified investment portfolio ranging from equities to real estate.

“We are always on the lookout for sound investment vehicles, we are well diversified with assets on the stock market and some housing and retail developments. We are trading cautiously on investment choices as we deal with some legacy issues left behind by people before us,” he said.

He added, “NAPSA will not invest in equities just for the sake of investing. We are looking at investing in companies or bonds that will create jobs for this country. We recently invested in the IFC bond because it was primarily targeting SMEs. We cannot directly fund SMEs but we will always look for investment options that could add value to the economy.”

Mr Mpundu revealed that NAPSA is also seriously pursuing low cost housing as an investment option.

“We will soon be putting up more low cost houses in Solwezi, Mpika and other growing towns,” he said.

41 COMMENTS

  1. Mr. Mpundu is it your money? Should it be a problem if I buy my house at 55years? One thing we know is that you want to abuse our money. Please stop this rot.

    • I think they should give people the option as how the money is dished out. Lump sum or annoying trickle.

      A “one size fits all” solution is nothing less than patronizing lunacy aimed at embarrassing grown men and women by treating them like financial illiterates.
      And even if they are, none of your freakin business.

      They worked hard for the money and have right to decide how they get it.

    • MR.Mpundu has spoken well as pensions manager. Realistically speaking the only sensible pension in Zambia is one offered to the Republican Presidency or whichever pension includes monthly payments with a decent house or vehicle as option. Otherwise the lump sum system is just a joke. After thirty two years in service the lump sum I got in 2007 did not exceed (250,000,000) now 250,000 Kwacha what decent house can you buy or construct in that amount within the urban area. Monthly payment of 500 Kwacha falls below the minimum wage, it is only enough to ensure that a former civil servant is able to buy three newspapers everyday. Let reforms be made to pensions. Unions should not only fight for annual salary increments, but ensure workers get houses before they retire.

    • We all know the abuse of funds going on at NAPSA and how this proposal is aimed at benefitting the so called fund managers. The most unfair thing is NAPSA abusing the Law to dictate to grown ups how they should plan their retirement.

      In fact reforms are long overdue!
      Can we repeal that Law that compels everybody to contribute to NAPSA.
      Let each employee / employer choose which Pension Fund to invest with.
      In other words, Liberalise the Pension Fund market!

  2. these 1diots, after working for thirty…….. years you want to be paying me K686 per month instead of K600,000 lump sum. my salary was too little to build a house and you tell me pension is not for buying a house, besides why decide for me as an adult. give me my money what happens there after is non of your business. did you decide for me how to use my meagre salary, why my pension?

    • By definition, and as provided for in the Income Tax Act, a pension is a stream of money receivable out of past employment and upon Retirement, for life. Any such similar regular Payments made for fixed terms, short of life or in pertuity may only qualify as Annuity, or the lesser provident funds that offer lump sums. NAPSA is a pension fund and therefore has been constituted to offer pensions – regular benefits for life. The National Pension Scheme Act was, unlike the repealed and defunct National Provident Fund [that used to offer lump sums], is meant to provide life supporting income, perpetual to the Beneficiary. Separate saving schemes are available else to support future investment ventures, certainly not by NAPSA!

  3. MPUNDU, YOU HAVE SECURED A JOB AND THRIVE ON OUR MONEY. TOMORROW YOU WILL BE FIRED ANOTHER I.DIOT WILL COME. GIVE US OUR LUMPSUM PERIOD. OUR SALARIES CAN NOT BUILD ONE A HOUSE. UNLESS YOU ARE A THIEF LIKE YOURSELF MPUNDU.

    • Musonda, you could have a point, not every decent house or mansion is built in genuinely earned money. Mostly it is from stolen money. No wonder money owners die before they live in such houses built with stolen money. Workers who started work in KK’s time our incomes were humble, while KK taught us to work hard not for gain but for love and service to God and mankind. Chiluba came and gave away houses to people who did not deserve them, some had just joined the civil service. For thirty two years I served the nation and came out without a house because I occupied what was classified as institutional house. When my lump sum came it was too little to build or purchase a house and sponsor children in tersiary institutions. This is a plight an honest retiree.

  4. Mr Mpundu, it’s not that we don’t want to save, in simple economics terms, if our monthly salaries are far less then our consumption,clothing and children’s eduction, how do you expect us to save or even build a house? Don’t compare civil servants conditions of service with NAPSA’s.

  5. Stupid fools do you how it feels to let go of your money like that. pipo are on contracts where gratuity is just one month basic salary, no loans or any other pension scheme and you tell me i cant get my lumpsum at the end. what is that . if my money has reached say 60,000. when are you going to finish paying me, dont use our money to expand your programmes, targetting SMEs are you giving us interests on those loans u are giving. we in the private sector are suffering pay more taxes,including napsa difficlut to get loans, no increments, govt quite on us, this is a down fall for PF on the Copperbelt especially Ndola. Napsa we can start avoiding paying this be careful.

    • Why are you using profanity? Are you trying to cover for your ignorance? Even in America where you are, do people get a lump sum in their social security payments after retirement? Check the Websters New World dictionary which describes a pension as a regular payment to one who is retired or disabled. Severance packages, gratuity etc are what you get in a lump sum.

  6. The best is to balance.Pay half as a lump some and then pay monthly pension that is equal or more than the minimum wage.If the monyhly pension is less than a minimum wage,then a lump some should be paid.

    • My thoughts exactly allow for some portion of lumpsum and then the rest should be monthly pension…..100 percent lumpsum ceases to be a pension because then it becomes a provident fund which we did away with many years ago….on funding SMEs well the risk factor must not be such that it is not calculated so approach with caution…

  7. Ba mpundu……it is better to call a spade a spade and not a bigger spoon. Iwe Mpunndu…Iwe Mpundu……Iwe Mpundu. How many time have i called you? Plse tell me how many ordinary zambians can aford to build a house from their meagre salary. Mr. Mpundu plse be serious when you are dealing with people`s lives and don`t just talk for the sake of pleasing your masters – PF. Infact Mpundu i feel very much annoyd if you were nearby kuti naposa makofi into you……Annoyed Zambian.

  8. Mpudu Is a fool. May be if he was Kapya he would have been wiser.
    Who is he to tell people when to start investing. You can Invest until you die. He thinks he will be at NAPSA for ever? Nimbwa sana

  9. We have heard of state companies (zesco & napsa) funding political activities of the ruling party. Would you rather you continue giving lumpsome amounts to these political activities whilst the owners of the money continue receiving peanuts.

    Infact most civil servants look miserable and malnourished because of failing to meet their food requirements. In short they are suffering. Do you Mr. Mpundu want to extend this suffering?. The big day they wait for is when they receive their lumpsome to make them achieve their dreams.

    • mr. mpundu sir. If that leg of yours in well now, i will send another bout of missiles. Dont just yap about removal of lump sums when you not offering alternatives. don’t just get that hefty salary. besides, it is highly irresponsible for you to reveal policy options that are yet to be cleared by cabinet. i thought its the prerogative of senior government officials to announce these policy measures, once agreed in cabinet. You can have restricted yr comments to operational issues and yet u ended up delving in policy matters.

  10. This is one other issue that will decampaign PF in 2016. Ine ndelolesha fye. I am fail to understand why this ***** Mpundu shud decide for my Father how he should use his money. On the other hand Mpundu seems to think that the HEFTY salaries at Napsa, which are even higher than places like ZRA, are the normal range for Zambian jobs. He doesnt understand that most Zambian cant build from their salaries. The only lowly paid Zambians who are managing to build mansions in places like garden house compound and other places, are police men- I dont even know they are managing. Back to the topic, Mpundu, stop talking about money which is not yours. If NAPSA isnt the type of pension that can deliver what we want, we can change it to be one. Its NAPSA serving us, not vice versa.

  11. Abash monthly pension payments by NAPSA and Viva lump sum payment! To hell with the proposed increase in the retirement age. Government is trying to run away from paying retirees. This is a death sentence for future retirees. Zambians wake up!

  12. Mr Mpundu should be realistic.
    What is the average monthly income of a zambian, if he is in formal employement at all? lets put it at threshold value of ZMW 3,000. Deduct the Basic Needs Basket BNB as at may 2013 ZMW 3625.2 (JCTR). Clearly there is a deficit of ZMW 625.2. So an average household needs extra income to meet basic needs, which in most cases is not available. So to make ends meet, pilfering, corruption and other vices come into play. So in such circumstances how can a learned person like Mr Mpundu justify his statement that Zambians should cultivate culture of saving? How do institutions like NAPSA use demorgraphic information? How do they plan?
    Facts are that most Zambians cannot afford to save and later on build houses while in employement. So Viva Lump sum Pensions!!

  13. The only people who enjoy the members contributions are the very people who work for NAPSA. People should choose how to use the money they have worked for. What happens to the remaining money if someone is given a part payment and dies a few months later? Do the spouse and children have access to it or its forfeited to napsa?

    • With good pension fund rules yes! the surviving spouse will continue to get a pension whilst the children if of age should ordinarily be allowed to share a one of payment from a portion. The surviving spouse will then usually get half what the hubby was drawing and in a well written plan even the intial lumpsum drawn down is written off so that spouse enjoys 100 percent….but only if properly written and managed….

  14. The way good Pension scheme works is you get your lump sum and then you start receiving monthly pension till you die (children below & spouse also die).

  15. Ba NAPSA Sure you dont have confidence in the pension scheme you mange. Your employees Mr. Mphundu and yourself are not members of the pension scheme you manage. you have created an in house pension scheme for NAPSA employees. does it make sense sure. I have never heard of a public pension scheme with its employees having a separate pension scheme. dont fool us. You invest funds in constructing houses for sale at the prices beyond the pension scheme members reach. How on earth do you expect someone to buy a house when their monthly income is just above the minimum wage? how do u expect some1 to survive after they retire with a monthly benefit of ZMW 800?

    • Rizzo…does it matter? So NAPSA employees know the money they will get from the fund they manage is not enuf..Besides it creates conflicts. investments ethics and professional standards are more likely to be violated..there is no justification no matter how you put it.

    • besides NAPSA is never checked by PIA..this is changing anytime soon. as i am writing the act is being amended. mukonse.you cant have a public pension scheme whose investment decision lies in one man (Mphundu). if he is not there no one make an investment decision. dont think we dont know what is happening there.

  16. Mr Mpundu why hold on to someone’s monies just pay pay lumpsum those monies belong to someone.Life expectance in zambia is fourty to fifty why should you let people die leaving money behind.No even buying a house at fiftyfive is not a bad idea than making mphundu more rich as Napsa chief .Hikaumba Leonard is right lumpsum should be paid. Zambia should cultivite culture of saving what dose he mean? Because napsa thats were we save our money hence lumpsum be paid at the end.

  17. Redefining the Napsa Investments policy statement in view of asset classes it invests in clearing matching thre returns and risks to the pension liabilities

    Also knowing that the worker of today is not a worker of retiring to the full service in years or the opposite to “Napsa holding to maturity principle donot hold”

    There is a shift in defined benefits schemes to defined benefit schemes world over as tenure of employment changes and therefore the schemes in contribution affecting the IPS and the way placing of investements are evolving in portfolios weather local or Global managing well the effects of generation imbalances

  18. You are just block no further excuses. Too many unnecessary changes. Weather you pay in lumps or bits poor people will still exist. a decree from God

  19. @ Mr Innocent Chifuntumba: In your opinion and based on your comments, you would have loved to be receiving ZMW 800 monthly as opposed to ZMW250, 000 (rebased) lump sum you got? which of the two is a joke? mind you pension benefits are directly linked to your income; if your income is low the benefits will be low even when the number of years is long. In 2007 one of my fellow retrenches got a decent house in Ndola, Ndeke @ ZMW 100,000.
    You have to live within your means and try to multiply your “seed” rather than consuming everything.

  20. From Defined to undefined affecting cashflows pattern for many schemes including the way they position themselves given the deficits in many schemes

  21. NAPSA is simply a Ponzi scheme. Contributions being paid in are being used to pay people that have retired. Mpundu admits about past invesment legacies (in simple language corruption) that his management has to deal with. One day this NAPSA will have a reality check where it will not be able to pay out money to retirees and that is when it will collapse. Politicians in the past have used NAPSA to pay for their campaigns – Chiluba was not ashamed to do this. What NAPSA pays to retirees is complete peanuts in today’s economy and they should be ashamed to call themselves a social security scheme.

  22. this bafoon mpundu has a warped brain, why come with such evil schemes for people that make you stink with money all over lusaka city. Its only in zambia were people can cry and cry over such matters and a bafoon at the helm of that institution talks carelessly without him being punished. Mpundu pay zambians their money, dont use it on small girls u chop every day.

  23. Pensions should be well regulated by law. In most countries you are given both a lump sum and a lifelong monthly payment. The ZCCM miners used to be given such. The national pension fund should be sitting on a gigantic sum of money that should have been invested in big businesses whose returns pensioners should be enjoying. This also calls for a review of the retirement age because 55 is just too young. Let the pensioner have more time to plan hos retirement

  24. Ba Mpundu do not exercise dictatorship on other people’ rights in fact u shud behave like that when it was in 1914. Not this time where even Babies are denying to be rapped in napkins but dyepers the world is changing and progressing at a supersonic rate now u stupid Mpundu u want to bring retrograsive ideas. U ***** give money in full not half half. Do U understand? Idi Amani

  25. Ba Mpundu do not exercise dictatorship on other people’ rights in fact u shud behave like that when it was in 1914. Not this time where even Babies are denying to be rapped in napkins but dyepers the world is changing and progressing at a supersonic rate now u stupid Mpundu u want to bring retrograsive ideas. U ***** give money in full not half half. Do U understand? Idi Amini Dada’s spirit is in you

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