By Dr. Brian Mushimba
I have followed this discussion with lots of interest. That government wants people to access their pension funds before they retire. That such will incentivize people to invest and earn returns before they retire. The thinking may be noble and a good gesture but govt must be cautioned on the implementation of this initiative.
People that contribute to NAPSA are mainly career professionals. They have very limited access to entrepreneurial manoeuvres. They are comfortable working for however many years and then retire to access their hard-earned money and live the rest of their lives.
My caution is that allowing people to access this money cuts into what they will get when they retire. It opens them up to bad investments and become targets of all manner of fraud. Investing in a way that brings a return is a trade someone has to fully understand, embrace and commit to. It’s not a by the way thing that people can do when they knock off work in their spare time or on weekends.
If the idea is to allow people access to money so they can buy farms, and build houses while they are still gainfully employed, govt can make those facilitations without touching people’s pensions. Govt can set up schemes or compel financial institutions to grant workers loans to build and acquire farms while keeping their pensions intact.
It will be a disaster to speculate with this money that is supposed to give a semblance of dignity to elderly people that worked their entire life.
Only blind person will do what the Upnd are trying to do. I have checked many pensions and I haven’t seen which one allows the so-called partial withdraw. The Introduction to Pension Schemes by E M Lee only mentioned bonuses to pensioners and depends on what type of pension. Take caution.
Speak for yourself! It should not up to you to decide when a worker wants to access his money. Why should I get a loan to buy a farm when I can get money which I have saved up and buy for cash? That way, I’ll have options. And this opens up opportunities, such as getting a loan to start working on this very farm I have bought!
The argument of ‘bad investments’ or ‘fraud’ does not work either because the same still happens with the final pension. In fact, being defrauded of your partial pension is better because you still have the rest of your pension, and now you know better. You will not misuse it or be naive again. But if you fall victim to fraud from the current system, or you make a bad investment/misuse the money, what other options do you have?
I hold the same view, it’s like Brian read my mind
They have very limited access to entrepreneurial manoeuvres. They are comfortable working for however many years and then retire to access their hard-earned money and live the rest of their lives.
PLEASE GOVERNMENT DO NOT LISTEN TO PEOPLE LIKE MUSHIMBA WHO ARE THE VERY REASON WHY ZAMBIA WHERE IT IS NOW IN BAD SHAPE.
SOMETIMES IT IS BETTER NOT EVEN SAY ANYTHING. “THE CLIQUE IS BAD AND SELFISH INDEED”.
BALLY PLEASE FIX THE CLIQUE OF THIEVES.
WE ARE WITH BALLY ON THIS ONE STAY AWAY OUT OF OUR BALLY PENSION ACCESS. I CAN’T WAIT TO HAVE MY HALF OF NAPSA AND RE-INVEST IT MOBILE MONEY BANKING.
YOU MUSHIMBA KEEP QUIT.
I don’t know why people are scared to develop,we are already being subjected ruthless loans given by banks surely whats wrong with the idea of accessing part your pension money for investing into good poject,why should I wait for 55 years to build a descent house and die after just few year latter?
This is optional pleeeease ! I want part of my money now when am still energetic.
i disagree with the writer. this has to be left to any person to decide on their own. good investment opportunities will not wait until you get pension. many are good managers of finances and if they access their money now they will be able to rack up more money than they will get on their pension pay check. pension limits monies people will get while those that can use their partial withdrawals can earn more on returns they make on their investment. ultimately this has to be left to an individual to decide.
Brain should indeed speak for himself. The biggest enemy to progress is fear. Nothing wrong with you getting part of your money to build a house while you are still strong and get the rest later. Most workers suffer post retirement stress syndrome as a result of not knowing where to start from. Workers are not babies.
Pensions should be for contributors and the option to draw from benefits should be granted to increase liquidity. The drawbacks are obvious, NAPSA has been used as a tool for development, however, the investments NAPSA has made are highly questionable and their returns are not proportionate. I support partial withdrawals.
Everyone should decide when they want to get their money. Pessimists will always be there but that can not stop me from accessing my money if i feel i have a worthy cause to access my hard earned money.
NAPSA operates a pension Scheme, for life-long benefits. The weighted average and effective income replacement ratio of NAPSA is only 20%!
NAPSA is never a savings scheme.
Contributions to NAPSA are very meagre, at 5% and 5%. Contributions to NAPSA might need to be first enhanced before any Savings aspects might be considered.
On the other hand, Why not just create a totally separate Savings Scheme, instead of Disturbing the little pension benefits offered by NAPSA?
“money that is supposed to give a semblance of dignity to elderly people that worked their entire life”
I don’t think there is a pensioner in Zambia who can say good things about NPF or NAPSA.
This new model of partial access is the way to go.
What would happen if everyone decides to get the the money at the same time? Government has access and use of Napsa money through investments. Some people wi?l retire themselves for a peanuts others will be retired without knowing. Nappa like nhima have inherent problems already ?
Investing money pre or post retirement is not the real issue but the biggest one is the CHANGE of MINDSET about money. The user of money and what he understand is the real issue here, Most of us are consumers and have been driven more towards surviving than developing an entreprenueral mindset.
From the Ascent of Money…..Read and see how the giving employees of choices with their pension contributions benefited everyone even those not contributing as they were not in formal employment: READ TO THE END AND UNDERSTAND…you can google it.
ith output collapsing and inflation rampant, Chile’s system of universal benefits was effectively bankrupt. For Allende, the only solution was full-blown, Soviet-style takeover of the entire economy. The generals and their supporters knew they didn’t want that, but what did they actually want, given that the status quo was unsustainable? Enter Milton Friedman.
In March 1975, Friedman flew from Chicago to Chile to answer that question. In addition to giving lectures and seminars, Friedman came here, to the Moneda Palace, for a meeting with…
Read the ascent of money and how allowing people to choose their own pension plans and investments instead of forced constributions benefited both the employed and the unemployed
ith output collapsing and inflation rampant, Chile’s system of universal benefits was effectively bankrupt. For Allende, the only solution was full-blown, Soviet-style takeover of the entire economy. The generals and their supporters knew they didn’t want that, but what did they actually want, given that the status quo was unsustainable? Enter Milton Friedman.
In March 1975, Friedman flew from Chicago to Chile to answer that question. In addition to giving lectures and seminars, Friedman came here, to the Moneda Palace, for a meeting with the new Chilean president, General Augusto Pinochet. Friedman spent three-quarters of an hour with Pinochet, urging him to reduce the government deficit that he’d identified as the main cause of Chile’s sky-high inflation – then running at an annual…
This is one of the best Ideas I have ever heard. In fact we are even delaying. Let us implement this as soon as possible.
I am left to wander who truly has the heart for the poor worker between PF and UPND. I don’t think ba Brian Mushimba you’re being sincere. Please criticise not with malice. So many friends have I lost that have died leaving behind their NAPSA benefits. Why should I wait to die or reach 60 or 65 to get my benefits whose value will have reduced to almost nothing due to inflation and devaluation and my body will have waxed old? Better I get a third or half of my benefits and invest and even create jobs for someone while am still strong and the value of the Kwacha is at least not that bad now. Viva Bally! Viva UPND! Viva workers!
I agree with Brian here. People are naturally irresponsible.
Problem is your life span is too low, only about 1 out of 10 of you guys will reach 70 years old.
So get some money backm
This person he must be sick somehow, please visit any nearest hospital for checkups?
1. Why does he criticise a good idea/proposal?
2. Look in the past how many retirees got the pensions out of 10 people? Maybe only 1 person?
3. The proposal is most welcome?
4. For me I would even reduce the retirement age between 45 and 50 years?
Nowadays very few people reaching the age of 55years, by the time they reach at that age they are already finished?
Anyone opposing this proposal is a clear indication of political issues?
The proposal is clear and straight forward?
You should not ask what would be people be using this pension, ? That is purely out of question?
When you write articles like this please give us your direct contact so that we phone you and…
Please just give pensioners what is due to them either lump sum or part payment…why do you want to treat everyone like kids? NAPSA should be more concerned with how these people’s contrubutions are being invested not just pumping money in pointless Shopping Malls and Golf courses.
By the way who is DR Brian Mushimba …he is quick to call himself titles yet his thesis title was pathetic and has nothing to do with the subject he is talking about. Where were you when you were Minister…are you not the chap who gave Ethophian Airlines $30m to paint their aircraft’s tail in Zambia colours and call it Zambian airlines…shameless man.
There is more to managing pensions and pensions seLfies for people It’s something to take seriously apart from politics and provide properly longevity for the people because it’s a wider social security cover Some comments are very reasoned but the outlook and funding needs must begin from now,for those generations managing as a napsa and not individual isolated at the top level
THE BEST WAY TO GO ABOUT THIS, WHICH IS DONE BY MANY PENSION FUNDS AROUND THE WORLD, IS TO EXTEND MORTGAGE LOANS TO BUY HOUSES AND OTHER REAL ESTATE LIKE FARM LAND PAYABLE FROM THE PENSION DUES AND WHICH ARE SECURED BY BOTH THE PENSION DUES AND A MORTGAGE CHARGE OVER THE SAME PROPERTY. THIS COULD BE DONE FOR THOSE WHO QUALIFY FOR A FULL PENSION AT SAY AGE 55 YEARS( EARLY RETIREMENT OR WITH A MINIMU OF 180 MONTHLY CONTRIBUTIONS). THE PUBLIC SERVICE PENSION FUND HERE USED TO HAVE SUCH A PROVISION.
THE QUESTION THAT MAY NEED TO BE ADDRESSED IS THE MECHANICS OF REPAYMENT IN A SITUATION WHERE THE PENSION IS PAID AS AN ANNUITY AND NOT A LUMP SUM COMMUTTED AMOUNT. OTHERWISE IT IS A GOOD IDEA.
There is more to managing pensions and pensions seLfies for people It’s something to take seriously apart from politics and provide properly longevity for the people because it’s a wider social security cover Some comments are very reasoned but the outlook and funding needs must begin from now,for those generations managing as a napsa and not individual isolated at the top level The current napsa innitiatives must be supported to anchor the National pensions security long-term
Dr Brian Mushimba, you have missed the point. The issue of partial withdrawals of pension benefits is not out of this world. Namibia which got independence after Zambia allows its public service workers to have access to their pension savings after serving for 10 years in public service. This helps public service workers to be able to plan ahead of their retirement. If you have invested well, there can be no talk of destitution during retirement. It matters that public service workers are able to invest part of the contributions to their pensions early in their working lives so that they are not entirely dependent on a public service job for a livelihood. It also helps workers think of retiring early and learn to work for themselves. There are numerous examples of Zambians working for…
… institutions paying them well that retire early. The Bank of Zambia is one of them. I have seen a good number of Bank of Zambia employees go on early retirement because their gratuity and retirement benefits are hefty and would want to invest early in their lives. That frees up vacancies at BOZ that allows fresh graduates to take them up. If we have more people investing and retiring early, we are likely to have more entrepreneurs in the country who will be able to employ many other Zambians. I do not believe in public service workers waiting until their retirement before they can access their contributions towards their pension. That money is just not enough to enable you live on. It is better to access that money whilst working so that you are able to learn the art of growing money…
… earlier on in your working life and can plan better for your retirement through investing what you work for whilst still working. Bank loans are very slavish as they have high interest rates and take long to repay. With the high bank interest rates, it is possible for you to continue paying for your bank loan even in your retirement. The UPND government should quickly change the NAPSA Act with a view to allowing workers begin to access their contributions towards their pension after serving for a certain number of years as is the case in Namibia (after 10 years). Workers’ NAPSA contributions have been abused for too long by politicians. It is about time these contributions are able to work for workers themselves.
If you don’t contribute why are you so consene leave us alone us we contribute we can’t wait to 55yrs the government has a good plan
Those that do not want will not get,let us who want and have use for the money now get.
Don’t speak on my behalf!
It’s our morning we want to invest it when we have energy .who have you seen begging because he ate his pension. Let people get their old of thinking should be avoided. Napsa employee get paid more money than the contributors of the money
I agree with Hon. Brian Mushimba. Govt should be careful how they handle this issue of NAPSA contributions.
In the first place, the contributions accumulated by the majority of employees is ridiculously low that giving out a percentage of their contributions will not enable them build houses. They could perhaps buy plots and then what.
Let Govt and the pension manager (NAPSA) sit together and analyze each contribution and then decide way forward. From my analysis a former Industrial Relations Manager, I can tell you that the contributions are so low that most employees won’t get any benefit from such lump sum payments.
Let Govt come up with a revolving fund from which they could lend out monies for home empowerment instead of distorting pension funds.
On the other hand, I…
Further, on the other hand, I agree with Govt’s caution to pension funds not to mismanage pension funds by investing into toxic ventures.
Let civil servants with brains on how to invest their hard earned money get there partial pensions while they still have the energy and the vigor to do great things for themselves and the future of their families. You without brains and the fear of being defrauded or fear of losing the money because of laziness, plz keep your ideas to yourself, let others get what belong to them. Gone are days when you want to be treated like a government baby, people yearn for capital to invest and secure there futures. No doubt we want our partial pension money withdrawal with immediate effect. We say no 100% to the rubbish article above.