By Ndakaziva Majaka
The National Social Security Authority (Nssa) has resorted to issuing garnishee orders to defaulting employers after the authority recorded a $217 million debtor’s book at the end of 2015, it has emerged.
Nssa — which provides social security to retired employees through employee contributions — is paid by employers every month after deducting the employee contribution.
However, in the wake of economic difficulties, most employers have been failing to remit to the authority.
Management at the authority, in a response statement accompanying the Auditor and Comptroller General’s (AG) report on Nssa’s performance for the year to December 2015, said it was employing various debt recovery methods.
“…it is conceded that failure of public entities to remit contributions severely affects cash flow. Efforts have been made to recover outstanding contributions (including garnishees, legal recoveries and entering into payment plans,” the management response read.
Most companies in the private sector are battling to survive while thousands have closed due to a deteriorating economic climate.
This comes as the Zimbabwe Revenue Authority has also resorted to slapping companies with garnishee orders as economic difficulties worsen, making it almost impossible for local companies to pay their taxes.
As at December 31, 2015 local employers owed Nssa $217,5 million, a situation that has affected the authority’s pension disbursements and investments.
The AG — Mildred Chiri —said Nssa however, could not account for the debtors because it did not maintain a database for individual contributor’s accounts.
“…The authority was owed $217 582 312 by employers as at the end of the year 2015. While the authority could establish what it is owed through a year-end debtor’s ascertainment procedure, it was not able to identify which particular individual employers were not paid up,” said Chiri.
She said government and public entities owed the authority a total of $97,1 million as State employees accounted for about 42 percent of the total debt.
“Through this, the authority is deprived of funds for its daily operations and investment opportunities.
“A non-performing debtor’s book creates liquidity challenges which have a direct impact on ability to settle current and future pension obligations,” she said.
Nssa also said government had undertaken to issue Nssa an initial $69 million worth of Treasury Bills (TBs) to extinguish the debt balance.
Government — which employs around 350 000 employees — has been struggling to meet pension contributions as well as pay its employees.
The authority lost over 14 000 contributors in 2015 due to retrenchments and company closures as the economy continues to struggle.
According to Public Service, Labour and Social Welfare minister Prisca Mupfumira’s 2015 ministerial statement on the state of affairs at Nssa, the authority is bleeding due to economic problems.
In 2015, Nssa collected $215 million of which $172 million was for the pension scheme and $43 million for the workers compensation insurance funds, according to Mupfumira.
These contributions were seven percent below the 2014 collections of $231 million, on the back of economic difficulties. Daily News
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