Zambia’s Pension Overhaul

Introduction of new bills aims to improve pension systems, protecting contributors and ensuring timely remittances.

By Francis Maingaila ♥️

Lusaka, Zambia -(05-03-2025) - The Zambian Government has reaffirmed its commitment to tackling the country’s labour market challenges, including the growing informality, pension administration issues, and trade union fragmentation.

Speaking at the Tripartite Labour Consultative Council (TCLC) meeting at the Mulungushi International Conference Centre, Minister of Labour and Social Security, Brenda Tambatamba, emphasized the New Dawn government's resolve to implement labour reforms that promote economic stability and worker welfare.

She highlighted addressing pension system inefficiencies and improving employment conditions as top priorities for the government.

“Our labour reforms will not only address emerging industry trends but also create better employment conditions and ensure that social security funds play a catalytic role in national development,” Tambatamba stated.

As part of efforts to restructure pension management, Tambatamba announced the introduction of two new bills—the Pensions and Insurance Authority Bill and the Pension Scheme Regulation Bill.

The first aims to establish a Pensions and Insurance Tribunal to expedite the resolution of disputes involving pension contributors. The second bill will introduce government oversight of public pension schemes and create a Pension Protection Fund to safeguard retirement savings.

International Labour Organization (ILO) representative Felix Mwenge commended Zambia’s progress in social security reforms, noting that while strides have been made in stabilizing the economy through social protection initiatives, more investment is needed to expand coverage.

He emphasized that social dialogue between governments, employers, and workers is essential to foster social justice, economic growth, and improved working conditions.

Mwenge highlighted the Global Coalition for Social Justice, launched by the ILO, which is driving political commitments, investments, and actions aligned with national priorities while advancing the Sustainable Development Goals (SDGs).

He called for urgent interventions to address challenges such as working poverty, child labour, youth unemployment, and informal work, which contribute to inequalities in the labour market.

“The importance of social security cannot be overstated. It provides essential benefits across the life cycle, including unemployment, disability, maternity support, and general poverty alleviation,” Mwenge said.

He pointed out that Zambia’s social protection programmes have played a vital role in stabilizing the economy and protecting vulnerable groups, especially in response to the current drought crisis.

However, he called for increased investments to expand coverage, particularly in lower-income countries.

Mwenge also stated that an effective pension system is key to social protection, ensuring income security for older persons and vulnerable groups, reducing inequality, and influencing labour market dynamics.

“A comprehensive, well-coordinated, and equitable pension reform system is necessary to achieve efficiency and sustainability,” he said.

Zambia Federation of Employers (ZFE) President Myra Ngoma Sakala acknowledged the government’s ongoing efforts but urged for greater efficiency in union services, calling for decentralized operations and proper treasury regulations.

She commended the operationalization of the Public Service Pension Fund (PSPF) and Local Authority Superannuation Fund (LASF) as occupational pension schemes but raised concerns about the Pension and Insurance Authority (PIA) Bill and the Pension Scheme Regulation Bill.

Ngoma argued that certain provisions in the proposed bills could harm businesses, particularly the penalties for late remittances.

She cited Section 27 of the draft regulation, which mandates that employers remit pension contributions within 30 days or face interest penalties at the Bank of Zambia policy rate and a fine of 1,000 penalty units per day for unpaid contributions.

"These provisions will discourage participation in pension schemes and push employers toward alternative retirement benefit mechanisms," Ngoma warned.

She urged the government to adopt more supportive regulations that encourage compliance rather than punitive measures.

Ngoma also raised concerns about U.S. trade policies that could impact Zambia’s economy. She cited planned tariff adjustments on countries imposing tariffs on U.S. goods, urging the government to engage with the U.S. to mitigate potential disruptions.

"If this policy takes effect by April, it could hurt Zambian exports and further strain the economy," she noted.

Ngoma called for a phased approach to pension reforms, taking into account business realities.

“We need policies that encourage compliance without undue pressure. Incentives for businesses that comply would be more effective than penalties,” she said.

She expressed hope that the Tripartite Consultative Labour Council discussions would yield solutions that balance the interests of businesses, workers, and the economy.

Zambia Congress of Trade Unions (ZCTU) President Blake Mulala also expressed his views, welcoming the government's recent salary increases for workers despite economic challenges.

However, he urged for faster negotiations in collective bargaining, emphasizing the need for timely agreements to enhance workers’ welfare.

The meeting also included FFTUZ President Muyaywa Mwiyaluka Kabisa, who called for a broader focus on employment standards and further support for workers in the informal sector.

UFEZ President Humphrey Monde stressed the need for closer collaboration between the government and employers to strengthen Zambia’s labour market.

Labour Commissioner Givens Mutengwa expressed his commitment to supporting the implementation of the new bills, highlighting the importance of streamlining labour policies.

ILO Country Director Wellington Chibebe concluded by reiterating the ILO’s commitment to supporting Zambia in implementing labour reforms and strengthening social security systems to create a more inclusive and fair labour market.