Zimbabwe News

Civil servants to pay pension contributions in foreign currency

The government has declared that all public service workers who earn in foreign currency would be required to pay their pension contributions in the same currency, starting this year.

Civil servants earn salaries both in United States dollars and ZiG and the new directive states that government workers would use the same ratio in making their contributions.

In a circular dated 28 May 2024, PSC Secretary Tsitsi Rosemary Choruma-Dozwa stated that the USD National Social Security Authority (NSSA) contribution would be implemented following the conversion of USD COVID-19 and cushioning allowances to pensionable emoluments with effect from 1 January 2024. She wrote:

Please be advised that the Treasury has concurred with implementing the provisions of Statutory Instrument (SI) 169/2021 on the public sector employees with effect from 01 January 2024, Section 8(b)(4) provides that, “Any person in Zimbabwe who earns remuneration in a currency other than that of Zimbabwe shall be required to pay his/her contributions in foreign currency and in cases where individuals earn remuneration in a combination of foreign currency and Zimbabwean Dollars, he or she shall pay contribution the same currency ratio.”

Please note that the outstanding contributions should be staggered in three months, commencing in 2024.

As reported by CITE, Choruma-Dozwa also wrote to the government’s Paymaster advising of the same instruction.

This came after NSSA Acting General Manager, Charles Shava wrote to the Permanent Secretary in the Ministry of Public Service, Labour and Social Welfare on 24 January 2024, requesting assistance to notify the PSC that following the conversion of the USD COVID-19 Allowance for public service employees into a pensionable salary, NSSA advised on the computation of NSSA contribution as guided by Section 8(b) of SI 169 of 2021.

The NSSA acting General Manager stated that this request “would go a long way in sustaining the viability of the NSSA scheme.”

This prompted Simon Masanga, the Permanent Secretary in the Ministry of Public Service, Labour, and Social Welfare, along with George Guvamatanga, the Permanent Secretary in the Ministry of Finance and Economic Development, to write to the secretary of the PSC, requesting the same order. Reads the letter in part:

Following the conversion of the US$ COVID-19 and US$ cushioning allowances for Public Service employees into a pensionable salary, the NSSA has advised that the computation of NSSA contributions is guided by Section 8(b) of SI 169 of 2021.

Given this development, NSSA is requesting the commission to implement the provision of SI 169 of 2021 with effect from 1 January 2024 to enable the viability of the NSSA schemes.

Meanwhile, unions representing public service workers have criticized the move, saying it will further impoverish them.

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