Occupational Pension Schemes :  What is their position in the Pensions Industry 

Occupational pension Schemes are pension arrangements set up by private employers for the benefit of their employees at retirement.  These schemes have played a very significant role in the provision of social security in Zambia.  Pension Funds have had a positive impact on the development and growth of our economy. It is for this reason that Government has allowed the establishment of private pension scheme as supplementary schemes to the National Pension Scheme. 

There are currently over three hundred occupational pension schemes in Zambia.  Some notable ones include Mukuba Pension Scheme, Kwacha (Bank of Zambia) pension scheme, Zambia Sugar Staff Pension Scheme, BP Pension Scheme etc.  Most of these occupational pension schemes are managed and administered by external service providers on behalf of their respective Boards of Trustees.  It is required under the Pension Scheme Regulation Act that the boards are of equal employer/employee representation. 

Pension Funds have invested their assets in property, government and corporate boards, treasury bills, equities, unit trusts, commercial papers and other money market instruments.  A few of the schemes do invest in insurance policies.  The investment decisions are made by the trustees who will ensure that there are good and secure returns for the benefit of the members.  Despite a number of factors such as lack of developed capital market and harsh tax regime, the industry has grown from K161 billion in 1997 to K1.4 trillion in 2006.  This statistics does not include the activities of the National Pension Scheme. 

The role of the Pensions and Insurance Authority is to provide for the supervision of these pension schemes.  This is done through the provision of prudential regulation which include among others; the requirement to have pension funds audited annually, actuarial valuations of pension schemes, preparation of annual benefit statements for members etc.  The Authority through its inspectorate does conduct inspections to ensure that pension schemes comply with various pieces of legislation.  Through its supervisory activities the Authority ensures that members assets in the pension schemes are secure.

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