What should a company do about payments to NSSA if it closes for a while then re-opens for business?
What is the procedure? These are questions that were asked by one of the readers of this column recently. An employer is supposed to inform NSSA of any changes that occur in any of his registration details.
That includes informing NSSA when the business closes down. It also includes informing NSSA if the company resumes business.
An employer is also required to inform NSSA when an employee leaves employment, whether this is by way of resignation, dismissal, retrenchment or death.
A company that closes down should therefore write to NSSA advising it of the closure and submitting a PC4 form listing the employees whose services have been terminated.
NSSA compliance officials will visit the company’s premises to verify that the company has closed and the employees’ services have been terminated.
If the company resumes business, then NSSA must likewise be informed of this in writing. The employer’s social security registration number (SSR number) will remain the same, since it is not registering anew but simply resuming business.
The company must also submit another PC4 form listing those employees who were already members of the NSSA pension scheme that it has engaged or re-engaged.
Any new employees who were not previously registered with NSSA must complete a P3 employee registration form, which should be given to the employer for submission to NSSA.
The company then, as previously, deducts the employees’ national pension fund contribution from their wages, reflecting the deduction on their payslips, and remits to NSSA by 10th of each month these contributions together with a matching employer’s contribution and the Worker’s Compensation Insurance Fund (WCIF) premium for each employee.
The WCIF premium is paid by the employer. The employee is not supposed to contribute to the WCIF. This is the employer’s responsibility alone.
If the company’s closure was always intended to be temporary, for instance if it was for renovations and the employees therefore remained in its employ, then the employees and employer remain liable to pay their monthly contributions.
The employer may, however, negotiate a payment plan, if the company is likely to find it difficult, due to lack of income during the closure period, to maintain the monthly payments.
However, unless the employees have been retrenched, both they and the company remain liable to continue with their monthly payments.
It is the employer’s responsibility to provide NSSA with this information. Any changes in an employee’s name, national identification number or address, as well as beneficiary details, should likewise be put in writing and be accompanied by proof, where necessary.
Other changes of information the employer is required to furnish NSSA with include any change in the name or designation of the business, any change of the business address, any closure, not only of the business but of any branch and the opening of a new branch.
If a company ceases to be an employer or resumes being an employer, NSSA must be informed of this. If the company changes the nature of its business, NSSA also needs to be informed about that. The reason is that Worker’s Compensation Insurance Fund (WCIF) premiums differ according to the assessed risk of particular business sectors.
As for the employees, if they leave a company’s employment, then when they are engaged by another company they must notify the new employer of their social security number, if they know it.
The new employer should submit to NSSA a P4C form with the employee’s details on it, so that NSSA can update the employee’s employment record.
This is important because when a beneficiary becomes entitled to a benefit, whether the benefit will be a grant or a pension and the amount of the benefit, depends in part on the number of years and months for which contributions were paid to the pension fund.
Another correspondent wrote: “I joined NSSA in 1995, worked for three companies before until 2010. I am now 55 years and have not worked ever since then. Is there anything I can do to get money from NSSA?”
The answer to this is that when you turn 60, if you are still unemployed, you can claim a retirement benefit. If you contributed to the NSSA national pension scheme for at least 120 months, then you will be entitled to a pension. If you contributed for less than that, then you will be entitled to a grant.
However, if you are able to obtain formal employment before you reach the age of 60, you might well, depending on what you were earning in your last job and when exactly in 2010 you stopped working, to receive a higher pension than if you remain unemployed until you reach the age of 60.
That is because the amount of the pension, presuming that you did contribute for at least 120 months, depends on your contribution period and monthly insurable earnings in your last job.
Between January and April 2010 there was no insurable earnings limit, so, if you retired within the first four months of 2010, your insurable earnings in your last job would be whatever your basic earnings were when you left the job.
However, from May 2010 until May 2013 there was a maximum insurable earnings limit in place of US$200 per month.
If you earned more than US$200, your insurable earnings during that period would have been only US$200.
As from June last year the maximum insurable earnings limit went up from US$200 to US$700. It would only be possible, at the age of 55, to claim your pension if for at least seven of the previous 10 years, you were employed in a job categorised as arduous, such as agricultural work, heavy truck driving, quarrying and some forestry and mining jobs.
To the woman who asked whether she would be eligible for a pension or lump sum grant, since her late husband had contributed to the national pension scheme for 114 months, the answer is that it would be a lump sum grant, since he had not contributed for the minimum 120 months required for a pension.
As regards to when this will be paid, contact the nearest NSSA office with details of the receipt that was issued when the claim was submitted.
Talking Social Security is published weekly by the National Social Security Authority as a public service. There is also a weekly radio programme on social security, PaMheponeNssa/Emoyeni le NSSA, at 6.50 pm every Thursday on Radio Zimbabwe and Friday on National FM. Readers can e-mail issues they would like dealt with in this column to mail@mhpr.co.zw or text them to 0772-307913. Those with individual queries should contact their local NSSA office or telephone NSSA on (04) 706523/ 5, 706545/ 9, or 799030 /1.