NATIONAL PENSION SCHEME ACT
Arrangement of Sections
1. Short title
NATIONAL PENSION SCHEME AUTHORITY
3. Establishment of National Pension Scheme Authority
4. Functions of Authority
5. Powers of Authority
7. Secretary, inspectors and other staff
NATIONAL PENSION SCHEME
8. Constitution of the National Pension Scheme
9. Benefits under Scheme
10. Vesting of existing fund and funds of the Scheme
11. Membership of Scheme
12. Contributing employer
13. Registration of contributing employers
14. Responsibility for payment of contribution
15. Payment of contributions
16. Treating unpaid contributions as paid
17. Refund of contributions paid in error
18. Retirement and condition for award of retirement pension
19. Amount of retirement pension
20. Duration of retirement pension
21. Lump-sum payment
22. Early retirement
23. Invalidity pension
24. Amount of invalidity pension
25. Duration of invalidity pension
26. Invalidity lump-sum payment
27. Establishment of medical boards and appointment of medical officers
28. Medical examinations
29. Survivor’s benefits
30. Family dependant
31. Survivor’s pension
32. Duration of survivors pension
33. Survivor’s lump-sum payment
34. Funeral grant
35. Adjustment of benefits
36. Time and manner of making claims
37. Repayment of benefits improperly received
38. Benefits to be inalienable
39. Transactional provisions for benefits
MANAGEMENT OF SCHEME
40. Management objectives of Scheme
41. Investment of funds
42. Application of funds of Scheme
43. Appointment of actuary
44. Actuarial valuation of Scheme
45. Action of actuarial report
46. Vesting of assets and transfer of liabilities
47. Registration of property to be transferred
48. Legal proceedings
49. Protection against attachment
50. Transfer of staff
51. Offences and penalties
52. General penalty
54. Repeal of Cap. 513 of the 1972 edition
to establish the National Pension Scheme Authority; to constitute the National Pension Scheme and to provide for matters connected with or incidental to the foregoing.
Act 40 of 1996,
Act 9 of 2000,
Act 7 of 2015.
This Act may be cited as the National Pension Scheme Act.
In this Act, unless the context otherwise requires—
“appointed date” means the date appointed by the Minister under section 1;
“Authority” means the National Pension Scheme Authority established under section 3;
“average monthly earnings” means the amount determined under section 19;
“Chairperson” means the Chairperson under paragraph 1 of the First Schedule;
“contributing employer” means an employer designated by section 12 as a contributing employer;
“Director-General” means the Director-General appointed under section 6;
“existing fund” means the Zambia National Provident Fund;
“medical board” means a medical board established under section 37;
“member” means an employee who is required to contribute to the Scheme under section 8;
“national average earning” means the amount determined under section 19;
“pensionable age” means the age of 60 years;
[Subs by s 2 of Act 7 of 2015.]
“pensionable employment” means employment in respect of which contributions are payable under this Act;
“Secretary” means the person appointed under section 7;
“Scheme” means the National Pension Scheme constituted under section 8;
“Vice-Chairperson” means the Vice-Chairperson elected under paragraph 1 of the First Schedule; and
“repealed Act” means the Zambia National Provident Fund Act.
NATIONAL PENSION SCHEME AUTHORITY
(1) There is hereby established the National Pension Scheme Authority, 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 subject to the provisions of this Act, to do all such acts and things as a body corporate may by law do or perform.
(2) The provisions of the First Schedule shall apply to the Authority.
(1) The functions of the Authority shall be—
(a) implement the policy relating to the National Pension Scheme in accordance with this Act; and
(b) control and administer the Scheme.
(1) The Authority shall have power to—
(a) subcontract any of its functions to a consultant or corporation with proven experience in the particular function being subcontracted;
(b) give such directions as it may consider necessary regarding the operations of the Scheme; and
(c) do all such other acts and things as are necessary to give effect to the provisions of this Act.
(2) In the performance of its functions, the Authority shall, subject to the provisions of this Act, not be subject to the control or direction of any person or authority.
(1) There shall be a Director-General who shall be the Chief Executive officer of the Authority and who shall, subject to the control of the Authority, be responsible for the day to day administration of the Authority.
(2) The Director-General shall be appointed by the Minister for a three year renewable term of office and shall be eligible for reappointment.
(3) The Director-General shall attend meetings of the Authority and may address such meetings but shall have no vote.
(1) There shall be a Secretary of the Authority appointed by the Authority on such terms and conditions as the Authority may determine.
(2) The other staff of the board shall be appointed by the Authority on such terms and conditions as the Authority may determine.
(3) The Authority shall appoint inspectors for purposes of this Act.
(4) The Director-General shall issue an identity card to each inspector.
(5) An inspector shall have power, on production of the identity card issued to him under sub-section (4), to inspect any book, register, account, receipt or any document relating to contributions or to the provision to register or to contribute under this Act are being compiled with.
(6) In inspecting the documents referred to in sub-section (5), the inspectors shall ensure that the records kept are in accordance with the provisions of this Act.
(7) Any person who obstructs an inspector appointed under sub-section (3) in the exercise of his duties under this section shall be guilty of an offence and shall be liable upon conviction to a fine not exceeding five hundred thousand penalty units or to imprisonment for a term not exceeding three months or to both.
NATIONAL PENSION SCHEME
(1) There is hereby constituted a Scheme to be known as the National Pension Scheme into which shall be paid all contributions authorised under this Act and out of which shall be met all payments authorised to be paid under this Act.
(2) The Authority shall be the trustees of the Scheme.
(1) The Authority shall pay pension benefits to a member who—
(a) retires from employment on attaining the pensionable age;
[S 9(1)(a) subs by s 3 of Act 7 of 2015.]
(b) retires five years—
(i) before attaining the pensionable age and has contributed to the Scheme for a minimum period prescribed by the Authority; or
(ii) after attaining the pensionable age; or
[S 9(1)(b) subs by s 3 of Act 7 of 2015.]
(c) has made contributions for at least 12 months and is certified by the medical board that he is incapable of gainful employment due to total or partial mental or physical incapacity which pension shall be determined by a formula by an actuarial study and prescribed by the Minister by statutory instrument.
(2) The Authority may pay lump sum benefits under such conditions as the Authority may prescribe.
(3) The Authority shall exchange the lump sum benefits referred to under sub-section (1) in accordance with actuarial advice, in such circumstances as may be prescribed.
(4) On the death of the member, the Authority shall pay the pension benefits due to the member in accordance with the provisions of the Intestate Succession Act and the Wills and Administration of Testate Estate Act.
(1) Without further assurance the existing fund shall be transferred to the Scheme and shall vest in the Authority which shall, subject to the provisions of this Act, have the sole management and control of it.
(2) The funds of the Scheme shall consist of—
(a) the fund of the existing fund;
(b) the assets of the existing fund;
(c) the combined contributions of contributing employers and members determined by, statutory instrument, in accordance with actuarial valuation and paid into the Scheme;
(d) income and capital appreciation derived from the holding of the assets of the Scheme in any form; and
(e) such other money or assets as may accrue to the Scheme.
(1) Every person who, before the commencement of this Act, is under pensionable age and is a member of the existing fund, shall be a member of the Scheme.
(2) Every person who, on the commencement of this Act, is not a member of the existing fund under sub-section (1) and is not less than 16 years but who is under pensionable age and is employed by a contributing employer, shall be registered as a member of the Scheme as provided for under section 13.
(3) The Minister may, by statutory instrument, provide for the conditions and procedures under which any person who is not eligible to become a member of the Scheme under this Act, may become a member.
Subject to sub-section (2) of section 11, contributing employer shall mean—
(a) a person, association, institution or firm registered as a tax payer with a contract of service with an employee; and
(b) the Government of the Republic of Zambia, local authority or parastatal or statutory body.
(1) Subject to the other provisions of this Act, every contributing employer shall, within one month, register under this section in the prescribed manner, unless such employer is registered under the existing fund.
(2) The employees listed in the Second Schedule shall be exempt from the provisions of this Act and the Minister may, by Statutory Instrument, vary or add the list of employees in the Second Schedule.
[S 13(2) am by s 2 of Act 9 of 2000.]
(3) The Minister may, by statutory instrument, prescribe the minimum number of employees in the service of any employer and the categories to be exempted under this section.
(4) The period of one month mentioned in sub-section (1) shall, in every case, begin upon the commencement of this Act or the date when the person concerned becomes a contributing employee.
(5) On the first day of the month following the month in which the period mentioned in sub-section (1) expires, the employee shall be a contributing employee for the purposes of this Act unless a further period is specified in the statutory order declaring that other categories of employers be contributing employers.
(6) Any employer who belongs to a category of employers exempted under sub-section (1) shall with the consent in writing of the majority of his employees, apply to the Authority in the prescribed manner, to register under this Act.
(7) The Authority shall notify an employer registered under sub-section (1) that his application has been approved.
(8) An employer registered under sub-section (7) shall become a contributing employer on the first day of the month following the month in which such employer receives notification that the employer has been registered under this section.
(9) A religious organisation which desires to make statutory contributions in respect of any minister of religion or any other category of employees may apply to the Authority in the prescribed manner to register under this section.
(10) The Authority shall notify the religious organisation registered as a contributing employer for the purposes of this Act that the application has been approved.
(11) A religious organisation registered under sub-section (9) shall notify the Director-General of the prescribed particulars of any minister of religion or any other category of employees in respect of whom it wishes to make contributions and shall become an eligible employer on the first day of the month following the month in which notification is made under this sub-section.
(12) A contributing employer who ceases to be an employer of any employee shall cease to be a contributing employer in respect of such employee.
(13) Any contributing employer who registers or is registered under the provisions of this section shall, without delay, register, as a member of the Scheme, every person who is or who subsequently becomes an employee in his service, by notifying the Director- General of such particulars of the employee as may be prescribed.
(1) A contributing employer shall pay to the Scheme a contribution in respect of an employee in his employment consisting of the employer’s contribution and the employee’s contribution at the prescribed percentage.
(2) A contributing employer shall be entitled to recover from his employee who is a member of the Scheme, the amount of the employer’s contribution by deduction from his earnings to which the contribution relates.
(3) Notwithstanding any agreement to the contrary, an employer shall not be entitled to deduct from the earnings of a member or otherwise reduce such earnings as part of the employer’s contribution.
(4) The prescribed percentage referred to under sub-section (1) shall be determined by actuarial valuation calculated to ascertain the financial sustainability of the the Scheme.
(1) A contributing employer shall pay contributions to the Authority at the end of each month and such employer shall submit, with such payment, all prescribed supporting particulars concerning his identity, period of employment and earnings of the member to whom the contributions relate.
(2) If any contribution is not paid within the time stated under sub-section (1) a sum equal to 20 per centum of the amount unpaid shall be added as a penalty for each month or part thereof after the date the payment is due and the amount of the penalty shall be recoverable as a debt owing to the Scheme by the employer.
Where the Director-General is satisfied that an employee’s contribution has been deducted from his earnings, but the employer has failed to pay this contribution together with the employer’s contributions to the Authority, he may treat the unpaid contributions as wholly or partially paid for the purpose of any claim to the payment or benefits, provided that this shall be without prejudice to any action to recover the amount due from the employer.
Where the Director-General is satisfied that any amount has been paid to the Authority as contributions which were not properly payable and that such amount was paid as a result of a bona fide error, the amount paid in error shall be refunded or applied to any current liability with the consent of the person who made the payment.
(1) Subject to the provisions of this Act, a member shall retire upon attaining pensionable age.
(2) A member may retire on attaining the age of—
(a) fifty-five years if, 12 months before attaining that age, the member notifies the contributing employer of the member’s intention to retire at that age; or
(b) sixty-five years if, 12 months before attaining the pensionable age, the member notifies the contributing employer of the member’s intention to retire at the age of 65 years and the employer approves the retirement.
(3) A member who retires in accordance with sub-section (1) or (2) and has made not less than 180 monthly contributions, shall be paid a pension.
[S 18 subs by s 4 of Act 7 of 2015.]
(1) The Minister shall prescribe the monthly retirement pension, by statutory instrument, based on the actuarial valuation calculated to ascertain that the Scheme is financially viable.
(2) The average monthly earnings shall be determined for each member at the time he makes a claim dividing the aggregate of pensionable earnings by the number of months of pensionable employment.
(3) Notwithstanding sub-section (2), the level of pensionable earnings shall be adjusted annually by an index based on the national average earnings as may be prescribed by the Minister, by statutory instrument.
(4) The minimum monthly pension shall be 20 per cent of the national average earnings.
(5) The Authority shall determine the national average earnings referred to in sub-section (3) annually, by applying statistics and data compiled by the Central Statistical Office.
The retirement pension payment shall commence from the month following the month by which the retired employee satisfies the conditions in section 18 and shall end in the month in which the retired member dies.
A member who has attained pensionable age and has retired from employment but does not meet the qualifications for a pension under section 18, shall be entitled to the payment of a lump sum as may be prescribed by the Authority.
(1) A member shall qualify for early retirement if he is within five years of pensionable age and has paid contributions for at least 180 months.
(2) The amount of the pension paid on early retirement under sub-section (1) shall be the amount that would be payable under sub-section (1) of section 18 reduced in accordance with a prescribed actuarial formula.
(3) An early retirement pension shall not be payable if the amount of the pension calculated in accordance with the provisions of sub-section (2) would be lower than the minimum pension under sub-section (4) of section 19.
A member shall qualify for invalidity pension if—
(a) he suffers from permanent invalidity; and
(b) he is under pensionable age and either—
(i) the provisions of section 18 regarding pension contributions are satisfied; or
(ii) the member had paid at least 60 monthly contributions of which 12 or more were paid in the period of 36 months immediately preceding the date the invalidity began.
(1) The Minister shall, by statutory instrument, prescribe monthly rate of invalidity pension determined on the basis of the members average monthly earnings and the length of pensionable service.
(2) The monthly rate of invalidity pension shall be supplemented by a prescribed percentage.
(3) The minimum monthly invalidity pension shall be 20 per centum of the national average earnings.
Subject to the provisions of this Act, invalidity pensions shall be payable for the duration of a permanent invalidity commencing with the month following the date of invalidity and ending either—
(a) when the member reaches pensionable age, if at that time the member is entitled to a retirement pension at the same or a higher rate; or
(b) when the member dies.
A member who qualifies for invalidity pension but does not satisfy the conditions under section 18, that member shall be entitled to a lump-sum payment as may be prescribed by the Authority.
(1) The Authority shall appoint medical boards or appoint medical officers for the purpose of examining claimants or beneficiaries who have claims to any benefits under this Act.
(2) A member of the medical board or a medical officer shall be paid such remuneration or allowance as the Authority may determine.
(3) The procedure for medical boards, guidelines to be followed and reports to be prepared by the medical boards and submitted to the Authority shall be prescribed by the Minister, by statutory instrument.
(1) A person shall apply for a claim for invalidity benefits to the Director-General.
(2) The Director-General shall refer a claim submitted under sub-section (1) to a medical board for determination.
(3) The Director-General may, at any time after the award of an invalidity pension, refer a person who receives an invalidity pension to a medical board to determine the medical state of the permanent invalidity.
(4) A claim to invalidity benefit referred to a medical board shall be, in a manner prescribed by regulations made under section 53.
(5) A beneficiary of an invalidity pension shall cease to receive his invalidity pension if he fails to comply with directions of the Director-General under sub-section (2), to be medically examined by a medical Board and to supply all necessary documents or information as may be necessary for the purposes of determining his continued entitlement.
Subject to this Act, a survivor’s benefits shall be paid to a member of the family or a dependant if at any time of death the member—
(a) was in receipt of a retirement pension or an invalidity pension;
(b) would have been entitled to an invalidity pension for permanent invalidity at the time of death; or
(c) had reached pensionable age and was entitled to a retirement benefit and had made a claim to such benefit.
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