Social Security Commission and your benefits
The Social Security Commission (SSC) is moving ahead with plans to implement a National Pension Fund (NPF), with the organisation having gone through a vetting process to select an appropriate entity to serve as administrator of the Fund.
The NPF aims to provide pension cover to all Namibians, moving away from the current scenario where pension cover is more readily accessible to formally employed workers, usually in the middle and high income brackets.
“The SSC pensions in Namibia are available more to people that are employed in formal jobs and at relatively middle/high income levels. But, the SSC strives to serve Namibians at all levels. People at the ground level like security guards and those working in the informal sectors also need SSC protections and programmes.
“Currently, many of the people at the basic and informal levels do not have access to pension funds. Because of this, the SSC is developing a programme to provide services for a wider base of Namibians,” said Castro Tjizoo, Acting Communications Manager at the SSC.
“The idea is to have everybody on board, so that our people can enjoy the benefits that come from being a member of a pension fund. I am happy to report that an expression of interest for an entity to assist the SSC to operationalise the National Pension Fund has been finalised and we are pursuing the process of shortlisting and appointments at this time.
“When the selection is done for this first process of sorting the expressions of interest, we will need to give the winner, the terms of reference, so that they know what is expected of them and they can begin the process of operationalising the NPF.”
He said the SSC plans to fit the organisation’s regulatory mission, which is administering the Funds. The SSC’s principal operations include: (a) registering employers and employees, (b) collecting and investing contributions, (c) assessing and paying claims, (d) providing benefits and (e) providing training and employment schemes and providing financial aid to students, under the Social Security Act, 1994 (Act No. 34 of 1994).
“This is within our mandate and the law provides that there should be a national pension fund,” Tjizoo said.
Currently, the SSC is running two funds: the maternity and sick leave and death benefits fund (MSD) and the employees’ compensation fund (ECF).
“The sick leave and death benefits fund belongs to an employee, where the contribution is shared on a 50/50 basis between employer and employee. Say your salary is N$1,000, the employer would deduct N$9,00 based on the formula of basic salary X 0,9 percent and the employer would contribute N$9,00 so N$18,00 every month should reach a specific Social Security Commission’s office, whereas on the Employee Compensation Fund employees are not required to contribute,” he said.
Tjizoo said contributions to the employee compensation fund are submitted by way of annual assessment by the employer.
“We look at the industry class where you are working, how many employees you have, so for the financial year they assess you and give you a notice of assessment. When you pay that, you pay per year. In between that period, whoever sustains an injury at work will be covered under the employee compensation fund. The SSC therefore, register the employers, not the employees under this fund,” he said.
“But there are conditions and limitations as to who qualifies for the ECF. Any person earning a maximum of N$81 300 per annum (that is a salary of N$6 775 per month or less) automatically qualifies for this fund. When your salary reaches N$81 301 and above, your employer needs to make special arrangements by completing a form to bring you into that scope of the act.
“If no special arrangement is made for those entering higher income brackets and you suffer an injury when you are on duty, you may not be covered as per the scope of the Act. And, employers are not obliged by law to make any special arrangements to assist such a worker not covered by the Act; it is up to them.”
Self-employed persons can voluntarily join the MSD fund.
“We are trying to bring these people to register even if it is their choice. We are trying to get these types of people covered even though the law does not require them to register. They have the option of registering on a voluntary basis and this is why we are bringing another programme for lower income, self-employed or informally employed people to have social security protections, to the table,” Tjizoo said.
Benefits are only available six months after one joins and the contributions should be received for six months continuously for one to qualify.
“We have cases where people change employers within the space of six months, but as long as they keep making payments to the SSC, they will still qualify for coverage after six months, it will not be a problem.”
The SSC has continuously revised its benefits, with a recent adjustment having been effected in March this year.
“Benefits have been increased tremendously for the past years. We paid N$10,500 maximum (p/m) for employees going on maternity leave. We moved the ceiling from N$10,500 to N$13,000, so whoever is earning from zero to that amount, they will get their full salary when on maternity leave.
“Anyone earning above that, our ceiling is N$13,000. Six years ago, the highest money we paid for maternity leave was N$2,400 (p/m) so you can see the enhancements we have put in place.”
Tjizoo said although the SSC has more than 600,000 individuals registered on its books, it continues to attract more workers.
“We are currently running a communications and publicity campaign aimed at teaching employers the importance of registering with the SSC. Registration trends from five years back show that we had more than 200,000 registered employees and at the end of the 2015 financial year, we had 611,000 clients. This shows that there has been productive growth at the SSC. By 2020, we should have almost 90-100 percent of the workforce under our programme. All Namibians should have social protection,” Tjizoo said.
As part of its corporate social responsibility, the SSC is investing N$43 million for the construction of maternal shelters at hospitals and the acquisition of needed medical equipment for certain areas of the country.
“We approached the ministry of health and social services and they identified their needs. They identified three locations where the need is more urgent, which is Outapi, Rundu and Katima Mulilo. In future, there is a chance that the programme would be active in other regions.
“Our programmes have already begun; we started in July 2016. We are committed to this cause. We are also availing N$3 million for the purchase of a state-of-the-art cardiograph machine also identified by the ministry of health as a need for better healthcare in its facilities.”
-Financial Sector Namibia 2016 Magazine