Unfulfilled Promises: The Mismatch in Policy Statements and Legislative Proposals for Pension Reforms

By Josiah Kalala
In the run up to the 2021 elections, the then head of the opposition United Party for National Development Promised to implement comprehensive pension reforms once elected to office. The campaign promise was repeated by the President when he addressed Parliament and been repeated by the Minister of Labour and Social Security. The need to reform the pension scheme in Zambia is well documented. To fulfil the electoral campaign, the government introduced the National Pension Scheme (Amendment) Bill No. 21 of 2022. The Bill, however, is far from a comprehensive revision of the national pension scheme. Even when considered as part of a partial revision, the Bill falls short of the promises made relating to the provisions in the Bill. Of particular concern is how the provisions of the Bill appear to not reflect the much publicised “mid-term withdrawal”.
Using the “effectiveness test” for legislation, there is a clear gap between what the purpose of the amendments were supposed to achieve, as stated in the various statements prior to the Bill being tabled and when the Bill was tabled. Effectiveness reflects the relationship between the purpose and the effects of legislation and expresses the extent to which it can guide the attitudes and behaviours. The purpose of the legislation can be identified in the policy statements that are made to support the legislative proposal and legislation. While there may be debate about presuming what the effects of the Bill may be, the text of the proposed amendments provides some direction. A part of the effectiveness test is examining the text of legislation and ensuring it reflects the correct ideas and communicates instructions with clarity.
Clause 39 (1) of the amendment Bill provides:
“Despite section 11 (1), a person, who before the commencement of this Act, was under pensionable age and was a member of the existing fund, may be paid a one-off age benefit under the existing fund where that person — (a) attains a minimum age of thirty-six; and (b) has made contributions to the existing fund.”
Section 11 of the principal act provides for membership to the scheme. The Amendment Bill does not amend the definition of ‘existing fund’ under the principal act. This means, any reference to ‘existing fund’ under the Bill refers to the Zambia National Provident Fund.
Clause 39 (1) of the Bill provides for a one-off age benefit. This is concerning because, clause 39 (2) provides:
“A person who receives a payment under subsection (1) shall not be entitled to a further payment of a benefit under the existing fund.”
Clause 39 (2) essentially means that once a person receives the one-off age benefit, they will not be entitled to any further payment under the existing fund. We have already expressed concern about the reference to ‘existing fund’ in the Bill. The statement and pronouncements issued by government indicate that the intention of the review was not to deprive beneficiaries of any potential future payments from the fund.
Therefore, the proposed provision in the Bill is not well conceived. By potentially denying beneficiaries any future pay-outs, the government will be undermining important principles in pension reforms that have been developed by the International Labour Organization. The proposal undermines a core function of pensions—securing the future of workers.
The National Pension Scheme (Amendment) Bill No. 21 of 2022 is not the only proposed law that has been sold to the public as solving a problem when, in fact not. There appears to be a gap in how policy statements or policy intentions translate into legislative reforms. This is a worrying trend because, it is against the law that public institutions are principally held accountable. If enacted, many citizens will expect that the famed “mid-term benefit” will be paid out and not a once-off age benefit.

Chapter One Foundation is a civil society organization that promotes and protects human rights, constitutionalism, the rule of law and social justice in Zambia. Please follow us on Facebook under the page ‘Chapter One Foundation’ and on Twitter and Instagram @CofZambia. You may also email us at infodesk@cof.org.zm