PRESS STATEMENT ON NAPSA PARTIAL WITHDRAW
the Zambian government is encouraged to immediately engage various stakeholders to rollout comprehensive financial literacy capacity building initiatives to allow the NAPSA beneficiaries to attain tangible benefits from the funds by engaging in productive investment opportunities.
21th April, 2023
URGENT FINANCIAL LITERACY FOR NAPSA CLAIMANTS
The National Pension Scheme Authority (NAPSA) was established in February 2000 by the National Pension Scheme Act No. 40 of 1996 of the Laws of Zambia. Its formation was after the repeal of the National Provident Fund (NPF) Act, which resulted in the NPF not receiving contribution on 31st January 2000.
Given the challenges faced in accessing the funds previously, the Government of Zambia made a deliberate decision to avail partial funds to workers before reaching the age of retirement (65years). This is commendable albert the likely negative effects of this policy shift. This will result in NAPSA Pre-Retirement Benefits Withdraw facility eligible employees withdrawing up to twenty percent (20%) of their contribution effective April 17th, 2023.
In an effort to curb poverty given the debt burden Zambia is facing resulting in increased social economic hardship such as unemployment, among ordinally citizens, we commend the President for signing the NAPSA Partial Withdrawal policy, as this will allow access of funds to beneficiaries which in return will boost their economic activities if managed well.
It is against the identified negative effects of this policy shift that the Zambian government is encouraged to immediately engage various stakeholders to rollout comprehensive financial literacy capacity building initiatives to allow the NAPSA beneficiaries to attain tangible benefits from the funds by engaging in productive investment opportunities.
It is however evident that previous delays in paying the pension funds to beneficiaries for alleged lack of funds by the government created a lot of vulnerabilities in their social wellbeing resulting in some of them failing to sustain their households. Cases of destitution became rampant among the retirees while some died before they could receive their dues from NAPSA.
By accessing the partial pension money, employees will now be able to invest their money in ventures of their choice while they are still in employment. This will definitely improve their household incomes.
We therefore recommend for the urgent need of financial literacy and investment knowledge sharing for all NAPSA partial withdraw claimants as this will minimize the risk by beneficiaries making wrong financial choices upon receiving their partial contributions.
ActionAid Zambia is also of the view that by NAPSA giving out 20 percent of the pensioners’ benefits, there will be increased liquidity in the economy that will assist boost the small-scale entrepreneurs and at the same time improving the wellbeing of senior citizens as they will afford improved access to public services such as health care services hence improving their quality of life.
To prevent any unforeseen challenges the government should also ensure that the initiative is tailored sustainably.
ActionAid believes in sustainable mechanisms of ending poverty and hopes this new pronouncement by the Zambian government will address the challenges faced by workers in Zambia as regards their pension benefits.
“ActionAid Zambia works with marginalized women, young people and children in communities and supports government initiatives meant to improve their social being and assist them drift from the poverty circles”.
ActionAid Zambia – Board Chairperson