Backdated pension deductions in civil servants US$ salaries to continue

NATIONAL Social Security Authority (NSSA) acting general manager Charles Shava says the deduction of pension contributions from civil servant United States dollar salaries, backdated to January, will continue over the next two months.

To cushion its workers from the macro-economic effects of the COVID-19 pandemic and worsening economic conditions, government increased allowances to its workers to US$300.

However, to make this pensionable, government decided to convert these allowances into wages beginning January.

The Public Service Commission began deducting the NSSA pension contributions from the US$300 last month, a process that is expected to continue over the next two months.

“The law says contributions to NSSA will be based on the currency of income so if an organisation is paying its employees in US dollars their contribution to NSSA will be in US dollars. If it is paying in ZWG, their contributions will be in ZWG,” Shava said, during a session of the Ipec/NSSA Journalists Mentorship Programme for 2024 last week.

“The particular issue of civil servants emanated from the fact that with effect from January this year, the US$300 was converted to a salary and by that operation their contribution to NSSA, because it became salary, had to be contributed to US$. So, as NSSA, we wrote to the Public Service Commission informing them of the need to align with the SI [statutory instrument] which was passed by government which the Public Service ministry confirmed with another SI to make sure that those deductions are done properly in US$ as per the law.”

He said there was a delay in the implementation of this request from the Public Service Commission.

“I think it only got operationalised in June so I think the Public Service Commission decided that they will possibly I am not sure whether they deducted all the money all at once or they spread it,” Shava said.

“I think I saw a letter where they will spread to over three months. But, unfortunately that is an issue that has nothing to do with NSSA.”

As the deductions to NSSA began last month, if these deductions continue over the next three months from June that could see these pension contributions from civil servant salaries continue to August.

The reason why they were spreading out the deductions is to minimise the impact of these contributions since it was backdated to January.

“That is an issue between the Public Service Commission and employees in government. So, as NSSA, we really don’t have anything that we could do or not do except just to enforce the law by making sure that contributions from the public service is done in the correct currency as per the law,” Shava said.

“This is from January 2024. This does not affect the private sector. I think their systems are working well. Those that are paying in ZWG are paying and those who are paying in ZWG are paying so we don’t have problems with the private sector. This is only for the public service.”

The deductions come at a time when civil servant unions have been complaining that workers are earning wages below the cost of living.-newsday