CHAPTER 260
PUBLIC SERVICE PENSIONS ACT

Arrangement of Sections

   Section

PART I
PRELIMINARY

   1.   Short title

   2.   Interpretation

PART II
PUBLIC SERVICE PENSIONS FUND BOARD

   3.   Establishment of Public Service Pensions Fund Board

   4.   Directors of Board

   5.   Proceedings of Board

   6.   Secretary

   7.   Functions of Board

   8.   Powers of Board

PART III
PUBLIC SERVICE PENSIONS FUND

   9.   Establishment of Public Service Pensions Fund

   10.   Membership of Fund

   11.   Vesting of Fund

   12.   Chief Executive

   13.   Qualifications of Chief Executive

   14.   Functions of Chief Executive

   15.   Other Staff

   16.   Objectives of Fund

   17.   Reports to Parliament

PART IV
FINANCE AND MANAGEMENT OF FUND

   18.   Dissolution of existing fund and repeal of enabling legislation

   19.   Transfer of assets

   20.   Property of Fund

   21.   Payments

   22.   Protection of member’s account

   23.   Application of Fund

   24.   Appointment of actuary

   25.   Actuarial valuation of Fund

   26.   Action on actuarial report

   27.   Financial year

   28.   Accounts and audit

   29.   Investment of Fund

PART V
CONTRIBUTIONS

   30.   Persons required to contribute and rates of contribution

   31.   Voluntary contributions for previous service

   32.   Method of payment of contributions

PART VI
AGE OF RETIREMENT

   33.   Age of retirement

   34.   Death after twenty years service

   35.   Service after retirement

PART VII
BENEFITS ON RESIGNATION, DISCHARGE OR DISMISSAL

   36.   Benefits on resignation

   37.   Benefits on discharge

   38.   Benefits on dismissal

PART VIII
BENEFITS ON RETIREMENT

   39.   Benefits for officers retiring on abolition of post or to effect greater efficiency or economy

   40.   Benefits for officers retiring on grounds of ill health

   41.   Benefits for officers retiring on grounds not otherwise described

PART IX
BENEFITS FOR SPOUSES AND CHILDREN OF DECEASED PENSIONERS

   42.   Benefits on death of probationer

   43.   Benefits on death of officer

   44.   Special death gratuity

   45.   Pensions for spouses

   46.   Pensions for children

PART X
MISCELLANEOUS

   47.   Information relevant to payment of benefits to be furnished

   48.   Circumstances when benefits may be withheld, suspended or reduced

   49.   Termination or reduction of pension to spouse

   50.   Pensions in relation to spouse and children of polygamous marriage

   51.   Medical examination or treatment of certain pensioners

   52.   Resumption of duty by officer retired on grounds of ill health

   53.   Computation of pensions

   54.   Transitional provisions and conditions of service

   55.   Regulations

   56.   Act to bind the Republic

   57.   Act to bind the Republic

   58.   Repeal of Civil service (Local Conditions) Pensions Act

      FIRST SCHEDULE

      SECOND SCHEDULE

      THIRD SCHEDULE

AN ACT

to consolidate the law relating to pensions and other benefits for persons employed in the Public Service; and to provide for matters connected therewith or incidental to such consolidation.

[12th December, 1996]

Act 35 of 1996,

SI 31 of 1997.

PART I
PRELIMINARY

1.   Short title

This Act may cited as the Public Service Pensions Act.

2.   Interpretation

In this Act, unless the context otherwise requires-

“appropriate authority”, in any case, means the authority charged by the Constitution or other written law with the power to appoint. to exercise disciplinary control over and to remove from office the person to whom that case relates;

“Board” means the Public Service Pensions Fund Board established by section 4;

“Child” in relation to any person entitled to a benefit by or under the provisions of this Act, means a child born in, or out of marriage, step-child, adopted child, and a posthumus child of that person, under the age of eighteen years;

“dependent”, in relation to any person entitled to a benefit by or under the provisions of this Act, means his spouse, child or such other relative dependent on the person for maintenance, as the Permanent Secretary, responsible for personnel management may recognise for the purposes of this Act;

“due notice” means three months notice given in writing;

“existing fund” means the Civil Service (Local Conditions) Pensions Fund which was established by the Zambia Civil Service (Local Conditions) Contributory Pensions Act and continued in being by the Civil Service (Local Conditions) Pensions Act, and the Pension funds established under the Defence Act and the African Education Act;

“Fund” means the Public Service Pensions Fund established by section 9;

“officer” means a person serving on pensionable terms in the Public Service who has been confirmed in his appointment;

“pension”, means an annual pension payable during the lifetime of the recipient;

“pensionable emoluments” means salary or wages, and any special personal addition to salary or wages granted without any condition that it shall not count for the purpose of calculating pension;

“pensionable service” means the aggregate of continuous service, if any, in respect of which contributions have been paid under Part V;

“Public Service” means the Judicial Service, the Civil Service, the Defence Forces, the Police and Prisons Service, the Teaching Service, the Zambia Security and Intelligence Service, and any other Government Service prescribed by the President.

“qualifying continuous Service” means service for a period of at least ten years for which an officer makes contributions under this Act.

PART II
PUBLIC SERVICE PENSIONS FUND BOARD

3.   Establishment of public service Pensions Fund Board

There is hereby established the Public Service Pensions Fund Board which shall be a body corporate with perpetual succession and a common seal, capable of suing and being sued in its corporate name, and with power to acquire, hold, charge and alienate, property, real or personal, and, subject to the provisions of this Act, with power to do all such acts or things as are necessary or incidental to the performance of the duties and the exercise of the powers imposed or conferred upon it by or under the provisions of this Act.

4.   Directors

   (1) The Directors of the Board shall be-

      (a)   the Permanent Secretary in the Ministry responsible for Labour;

      (b)   Permanent Secretary, responsible for personnel management;

      (c)   the Director of Budget, Ministry of Finance;

      (d)   a representative of the Attorney-General;

      (e)   the National Secretary of the Pensioners Association representing persons who have retired under this Act;

      (f)   the General Secretary Of the Civil Servants Union of Zambia;

      (g)   the General Secretary of the National Union of Teachers;

      (h)   a representative of the Defence Forces;

      (i)   a representative of the Security Forces;

      (j)   a representative of the Chamber of Commerce;

      (k)   a representative of the Lusaka Stock Exchange; and

      (l)   two persons appointed by the President;

   (2) The President shall appoint the Chairman of the Board from the members of the Board.

   (3) A member referred to in sub-section (l) may resign upon giving one month’s notice in writing to the President and may be removed by the President upon giving like notice.

   (4) The Office of a member shall become vacant—

      (a)   if the member is declared to be of unsound mind;

      (b)   if the member is adjudged bankrupt;

      (c)   if the member is lawfully detained, or the member’s freedom of movement is restricted under any law in force in Zambia for a period in excess of six months;

      (d)   if the member is sentenced to a term of imprisonment for a period in excess of six months;

      (e)   upon the expiration of not less than one month’s notice given in writing by the member to the President of the member’s intention to resign from the Board;

      (f)   upon the expiration of not less than one month’s notice given in writing by the President to the member terminating the member’s appointment.

5.   Proceedings of Board

   (1) Subject to the other provisions of this Act, the Board may regulate its own procedure.

   (2) The Board shall meet for the transaction of business at least three times every twelve months at such places and at such times as the Chairman may decide.

   (3) Upon giving notice of not less than fourteen days, a meeting of the Board may be called by the Chairman and shall be called if not less than five members so request in writing:

Provided that if the urgency of any particular matter does not permit the giving of fourteen days notice, a special meeting may be called, upon giving a shorter notice.

   (4) Seven members shall form a quorum at any meeting of the Board.

   (5) There shall preside at any meeting of the Board—

      (a)   the Chairman; or

      (b)   in the absence of the Chairman, such member as the members present may elect for the purpose of that meeting.

   (6) A decision of the Board on any question shall be by a majority of the members present and voting at the meeting and, in the event of an equality of votes, the person presiding at the meeting shall have a casting vote in addition to his deliberative vote.

   (7) The Board may invite any person, whose presence is in its opinion desirable, to attend and to participate in the deliberations of a meeting of the Commission but that person shall have no vote.

   (8) The validity of any proceedings, act or decision of the Board shall not be affected by any vacancy in the membership of the Board or by any defect in the appointment of any member or by reason that any person not entitled to do so took part in the proceedings.

6.   Secretary

The Chief Executive shall be the Secretary of the Board.

7.   Functions of Board

The functions of the Board shall be to-

      (a)   control and administer the Fund in accordance with sound business practices and in the best interest of the members of the Fund, subject to the provisions of this Act;

      (b)   establish a scheme for home ownership by the members of the Fund and to grant, on such terms and conditions as the Board shall determine, loans to the members of the Fund for the purpose of building or purchasing their own residential property; and

      (c)   do all such other acts and things as may be conveniently combined or carried out together with any function conferred upon the Board by or under this Act or are incidental to or connected with the carrying out of any such function.

8.   Powers of Board

In the performance of its functions, the Board shall have power to-

      (a)   cause to be carried out actuarial assessment of the Fund in accordance with the provisions of this Act;

      (b)   co-opt any suitably qualified persons to any committee for such period as the Board may determine;

      (c)   give such direction as it may deem fit regarding the operation of the Fund; and

      (d)   do all such other acts and things as are necessary to give effect to the provisions of this Act.

PART III
PUBLIC SERVICE PENSIONS FUND

9.   Public Service Pensions Fund

   (1) As from a date to be fixed by the President by statutory instrument, in consultation with the Board, there shall be constituted the Public Service Pensions Fund.

   (2) Without further assurance the existing fund shall be transferred to the Public Service Pensions Fund.

10.   Members of Fund

The Fund shall comprise the following members:

      (a)   the members of the existing fund; and

      (b)   such other persons, being employees of public service, as the Board may prescribe.

11.   Vesting of Fund and transitional provisions

   (1) The Fund shall be vested in the Board which shall, subject to the provisions of this Act, have the sole management and control of the affairs of the Fund.

   (2) The law to be applied with respect to any pension benefits that will have accrued to the credit of any member of the existing fund, on the commencement of this Act, shall be the law applicable to the existing fund.

   (3) The formula to be applied to the contributions and benefits of a member of the Fund as from the day after the commencement of this Act, shall be the formula set out in Parts V to XI of this Act as adjusted in accordance with the provisions of sub-section (4).

   (4) The contribution and benefit structure set out in Parts V to IX shall, on the commencement of this Act, be subject to adjustment by the President, in consultation with the Board, by statutory instrument, in accordance with an actuarial valuation conducted to ascertain the viability of the Fund.

12.   Chief Executive

There shall be a Chief Executive of the Fund who shall be appointed by the Board on such terms and conditions of service as the Board may determine.

13.   Qualifications of Chief Executive

A person shall not be qualified for appointment as Chief Executive unless the Board is satisfied that he has the academic attainments and experience relevant to the management of pension schemes.

14.   Functions of Chief Executive

The Chief Executive shall, subject to the provisions of this Act and to the general directions of the Board, be responsible to the Board for the direction of persons serving in the Fund and for the management of the Fund and in particular for-

      (a)   the collection of contributions and other moneys due to the Fund under the provisions of this Act and the payment thereof into the Fund;

      (b)   the payment out of the Fund of benefits and claims under this Act and of the expenditure necessary for the administration of the Fund;

      (c)   the investment of surplus funds in accordance with the provisions of this Act;

      (d)   accounting for all moneys received, paid out or invested under this Act; and

      (e)   carrying out such other functions as the Board may direct.

15.   Other staff

The Board may appoint such other staff as it may consider necessary for the performance of the functions of the Fund.

16.   Objectives of Fund

The Fund shall be based on the social insurance principle of pooling resources and sharing risks and shall pursue the following objectives:

      (a)   the Fund shall not undertake any business or make any financial commitment which is inconsistent with the basic objectives of the Fund and the interests of the members of the Fund;

      (b)   the Fund shall appreciate the concepts of the financing of pensions, the need to take account of long-term liabilities, and the linkage between higher benefits and higher contributions;

      (c)   the Fund shall maintain a distinction between employment conditions of service (such as those relating to retrenchment and early retirement) and eligibility for pension benefits;

      (d)   the Fund shall endeavour to maintain the real value of benefits;

      (e)   the Fund shall make adequate arrangements for the transfer or preservation of pension rights;

      (f)   the Fund shall maintain a realistic contribution structure;

      (g)   the Fund shall make adequate arrangements to avoid noncompliance;

      (h)   the Fund shall avoid delays and other constraints to the effective provision of adequate benefits under the Fund;

      (i)   the Fund shall maintain current records for members and contributions; and

      (j)   the Fund shall curb excessive administrative costs and shall ensure prudential management of the Fund.

17.   Reports to Parliament

The Board shall submit to Parliament annually a comprehensive report covering the operations of the Fund.

PART IV
FINANCE AND MANAGEMENT OF FUND

18.   Dissolution of existing fund and repeal of enabling legislation

As from the date mentioned in section 9, the existing fund shall be dissolved and the enabling legislation relating thereto shall stand repealed.

19.   Transfer of assets

When the existing fund is dissolved pursuant to section 18, all property, real or personal, and all rights and liabilities of the existing fund, and all property, real or personal, held by any person on behalf of the existing fund, shall, on the date mentioned in section 18, vest in the Board without any conveyance or other instrument or the authority of any court.

20.   Property of Fund

The Fund shall consist of-

      (a)   the assets vested in the Board under the provisions of section 19;

      (b)   contributions and interest paid into the Fund in accordance with the provisions of this Act;

      (c)   income and capital appreciation derived from the holding of the assets of the Fund in any form; and

      (d)   any other sums or assets accruing or granted to the Fund.

21.   Payments

   (1) All contributions shall be paid into the Fund.

   (2) There shall be paid into the Fund each month from the general revenues of the Republic—

      (a)   the amount equal to the sum of the contributions paid into the Fund during that month or such other amount calculated with regard to those contributions as may be fixed by the President in consultation with the Board following the advice of an actuary appointed by the Board;

      (b)   the sum of all payments made during that month to persons who have been required to retire—

      (i)   on abolition of their posts;

      (ii)   to facilitate an improvement, by which greater efficiency or economy could be effected in the organisation of the parts of the service to which they belonged; or

      (iii)   in the public interest;

      (c)   the sum of all payments made during that month to persons who retired on the grounds of their age or length of service, if that retirement was by virtue of an election, made as provided under section 35, to retain a date of retirement which is earlier than the date of retirement otherwise provided:

Provided that this paragraph shall not apply to any payment made in relation to a period after the date on which an officer, had he not retired earlier, would have been required under the provisions of this Act to retire.

   (3) Upon the retirement of any person in respect of whom a payment is made to the Fund by virtue of paragraph (b), of sub-section (2), there shall be paid from the Fund to the general revenues of the Republic an amount equal to the sum of the aggregate of the person’s contribution and the aggregate of the payments to the Fund in relation to him which were made under paragraph (a) of sub-section (2).

   (4) There shall be paid into the Fund from the general revenues of the Republic the sum of the amounts by which the interest on the investments of the Fund in any year is less than five per centum of the mean balance of the Fund in that year.

22.   Protection of member’s account

   (1) Subject to the provisions of sub-section (2), the sum standing to the credit of a member’s account in the Fund shall, until paid out in accordance with the provisions of this Act, remain the property of the Board and shall not form part of the assets of a member in the event of his bankruptcy or insolvency, or be liable to attachment in satisfaction of his debts; and any security, pledge or assignment given before or after the commencement of this Act which purports to include any such or part thereof shall, to that extent, be void.

   (2) A pension or other benefit granted under this Act shall not be assignable or transferable except for the purposes of satisfying—

      (a)   a debt due to the Fund or the Government; or

      (b)   an order of any court for the periodic payment of sums of money towards the maintenance of the spouse or former spouse or child or other dependant under any written law.

23.   Application of Fund

There shall be charged on, and discharged from, the Fund-

      (a)   the payment of benefits in accordance with the provisions of this Act;

      (b)   the whole of the expenses incurred in connection with, or incidental to the management and administration of the Fund, including the cost of staff and the audit and actuarial assessment of the Fund;

      (c)   any losses incurred on the realisation, or decrease in the value of any assets of the Fund; and

      (d)   any other payments authorised to be made out of the Fund under the provisions of this Act or regulations made thereunder.

24.   Appointment of actuary

The Board shall appoint an actuary, who shall be a person holding internationally recognised qualifications, to carry out the duties and exercise the powers imposed or conferred upon him by the provisions of this Act.

25.   Actuarial valuation of Fund

   (1) The Fund shall be valued by an actuary as may be required by the Board-

Provided that the Fund shall be valued at intervals not exceeding three years.

   (2) The actuary shall, upon any valuation of the Fund, prepare a report on the state of the Fund and, in regard to any surplus or deficiency revealed, the actuary shall recommend therein what action should be taken.

   (3) The actuary shall submit any report prepared by him under sub-section (2) to the Board which shall forthwith forward a copy to the President.

26.   Action on actuarial report

   (1) The Board shall pay due regard to any recommendations made by the actuary and, in doing so, may cause the rates of the contribution payable in respect of members to be increased or decreased.

27.   Financial year

The financial year of the fund shall be the period of twelve months ending on the 31st December in each year.

28.   Accounts and audit

   (1) The Board shall cause to be kept proper accounts in which shall be recorded all the financial transactions of the Fund and shall cause the books and accounts of the Fund to be audited as at the end of each Financial year and shall cause statements of income and expenditure, together with a balance sheet, to be prepared.

   (2) The Board shall appoint an auditor for each financial year.

   (3) The auditor appointed under sub-section (2) shall audit the accounts of the Fund for the financial year for which the auditor was appointed, and shall make a report to the Board on the accounts and other documents examined, and such report shall state—

      (a)   whether or not the provisions of this Act have been complied with;

      (b)   whether or not the auditor has obtained all the information and explanations which was required;

      (c)   whether, in the opinion of the auditor, according to the information and the explanations given to the auditor and as shown in the books relating to the Fund, the balance sheet for the year concerned is properly drawn up so as to exhibit a true and correct view of the state of the Fund; and

      (d)   whether the expenses of the Board incurred in the year concerned in connection with or incidental to the management and administration of the Fund are excessive.

   (4) As soon as the accounts of the Fund have been audited, the Board shall send a copy of the balance sheet and statement of the transactions of the Fund referred to in sub-section (1) to the President together with a copy of the report made by the auditor under sub-section (3), and shall keep copies of such balance sheet and statement available for inspection by any member of the Fund.

29.   Investment of moneys of fund

   (1)The investment of any moneys of the Fund not required to meet the current charges upon the Fund shall, subject to this section, be of the discretion of the Board which is hereby empowered to invest such moneys in any of the following ways:

      (a)   in any interest bearing accounts of any bank or institution which is governed by any written law of Zambia;

      (b)   in stocks, securities or funds issued by or on behalf of the Government or in stocks, securities or funds guaranteed by the Government; and

      (c)   in such other investment as may be approved generally or specifically by the Board.

   (2) The Board shall not invest assets in excess of twenty per centum of its net asset value in any one form of investment.

PART V
CONTRIBUTIONS

30.   Persons required to contribute and rates of contribution

   (1) Subject to the other provisions of this section, an officer or probationer shall contribute at the rate of seven and one quarter per centum of his pensionable emoluments or at such other rate as the President may fix by statutory order in consultation with the Board following the advice of an actuary appointed by the Board.

   (2) An officer or probationer shall not contribute in respect of any period of service—

      (a)   prior to his attaining the age of eighteen years; or

      (b)   after attaining the age of his retirement under the provisions of this Act.

   (3) If the initial contribution of an officer or probationer would be in respect of a period commencing after the officer has attained the age of forty-five years, such officer or probationer shall not contribute.

   (4) Subject to sub-section (5), where an officer or probationer is, during any period of the officer’s or probationer’s service, absent from duty with or without leave of absence, the officer or probationer shall contribute at the rate appropriate to the officer’s or probationer’s full pensionable emoluments during that absence whether the officer or probationer receives such emoluments or not.

   (5) Notwithstanding the provisions of sub-section (4)—

      (a)   the appropriate authority may direct that any period during which an officer or probationer is absent from duty without leave of absence shall not count as pensionable service; or

      (b)   an officer or probationer may elect that any period of absence exceeding thirty days which is granted to the officer or probationer on reduced pensionable emoluments or without pensionable emoluments shall not be counted as pensionable service; and, in either case, the period to which such direction or election relates shall not be counted as pensionable service and no contributions shall be paid in respect of it.

31.   Voluntary contributions for previous service

   (1) An officer or probationer who, immediately prior to being appointed as such officer or probationer, was a temporary employee may, with the consent of the appropriate authority, elect to contribute in respect of all or any past continuous service as temporary employee—

      (a)   which was service approved by the appropriate authority for the purposes of this section;

      (b)   which was immediately followed by service as an officer or probationer; and

      (c)   in respect of which contributions would have been payable under section 30 if such service had been as an officer or probationer.

   (2) The emoluments on which contributions shall be calculated following an election made under this section shall be the emoluments determined by the Permanent Secretary, responsible for personnel management.

   (3) An election made under sub-section (1) shall not be valid unless made within one month of the date when the officer or probationer is advised by the Permanent Secretary, responsible for personnel management, that he may make such election, and any such election shall be irrevocable.

   (4) Contributions which an officer or probationer elects to make under this section shall become payable on the date of his election.

32.   Method of payment of contributions

   (1) Contributions payable under this Part shall be payable monthly in arrears and shall ordinarily be effected by deduction from any pensionable emoluments payable to the officer or probationer and, in calculating the amount of any contribution, any fraction of the Kwacha shall be taken as one Kwacha.

   (2) An officer or probationer who—

      (a)   proceeds on leave with reduced pensionable emoluments or without pensionable emoluments; and

      (b)   has made no election under sub-section (5) of section 30:

may elect to defer the payment of contributions in respect of the period of his leave until the expiration of that leave.

   (3) Unless paid within one month from the date when they become payable, any contributions which are deferred under sub-section (2) or become payable under section 31 shall be paid with interest at the ruling Central Bank deposit rate in such manner as the Board shall determine.

   (4) Any contributions. including interest thereon, due under this Part which remain unpaid when any pension or other benefit becomes payable under this Act in respect of the officer or probationer from whom the contributions are due shall be deducted in such manner as the Board may determine from such pension or other benefit.

PART VI
AGE OF RETIREMENT

33.   Age of retirement

Subject to the other provisions of this section or any other written law, an officer shall retire on the fifty-fifth anniversary of the date of his birth:

Provided that—

      (i)   any member of the Defence Forces, or an officer of or below the rank of Chief Inspector in the Police Force, or an officer of or below the rank of Chief Officer III in the Prisons Service, may, on giving due notice, retire on or after attaining the age of forty-five years or after completing twenty years service whichever is the earlier;

      (ii)   the appropriate authority may, in consultation with the Board, prescribe earlier or later dates for the retirement of all or any of its officers.

34.   Death after twenty years services

   (1) An officer who dies after completing twenty years service shall be deemed to have retired immediately before the date of his death.

   (2) The estate of an officer to whom sub-section (1) applies shall be entitled to the commutation of two thirds of the pension payable in lump sum.

35.   Service after retirement

No service by any officer after the date for his retirement by or under this section shall be taken into account in calculating any pension or lump sum payment under this Act.

PART VII
BENEFITS ON RESIGNATION, DISCHARGE OR DISMISSAL

36.   Benefits on resignation

   (1) Subject to the provisions of Part XI and of sub-section (3), an officer or probationer who resigns shall be entitled to a lump sum calculated as follows:

SC + (SC × I × Y);

where SC = the sum of the officer’s contributions;

I = interest at current Central Bank deposit rate; and

Y = the number of completed years in respect of which the officer has contributed.

   (2) If a person who is entitled to a lump sum under sub-section (1) resigns without due notice, the appropriate authority may, deduct from that payment such sum as that authority may determine, being not more than the pensionable emoluments of the person, for that period of notice.

37.   Benefits on discharge

A probationer who is discharged shall be refunded the sum of the contributions the officer made plus interest at the ruling Central Bank deposit rate.

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