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ZAMBIAPS pension scheme can’t payRetirees from the Zambian Public Service may miss out on their lump sum benefits following the announcement that their PS Pensions Fund (PSPF) is K15 trillion ($A277 billion) in the red.Director of National Planning at the Ministry of Finance, Siazongo Siakalenge said the PSPF was experiencing serious financial challenges that were threatening its viability and sustainability. Dr Siakalenge said the Fund was currently in financial distress and was unable to pay benefits to retirees. He said pensioners could have to wait for a year before they would get their benefits. He said the Fund had been unable to maintain the value of pensions and had not awarded any increments to pensioners for the past three years. Dr Siakalenge said the problem had arisen from inappropriate pension scheme designs and closure of the scheme to new entrants in February 2000, when the National Pensions Scheme Authority was created. He said the Fund had put in place remedial measures to avoid delays in paying retirees benefits in future. Operation Manager at the PSPF, Richard Mwinga said the deficit of K15 trillion had been accumulating since 2000. He attributed the problem to the current design of the scheme where employees contributed less to PSPF but got more from it. Dr Mwinga said each contributor created a liability, which later created deficits. “The design of the scheme is inappropriate,” Dr Mwinga said. “There is no direct linkage between contributors and benefits.” He said Government reform of the scheme was urgently needed. Edition 121, 24 January 2012
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