Pensioners in Zimbabwe have said they often get US$20 from the National Social Security Authority (NSSA) which is not enough to cover their monthly expenses. They also received bonuses of ZW$92,000 in November last year. However, due to Zimbabwe’s high inflation, the value of the local currency is significantly lower in comparison to the US dollar. On the black market, ZW$92,000 translates to only US$9.20, and when using the government-regulated inter-bank rate, it amounts to US$15, making the total payment approximately US$35.
The NSSA follows a pattern of alternating payments between the local currency and US dollars each month. For November, pensioners received an upward payment in US dollars, but many pensioners expressed dissatisfaction with the amount, considering the country’s high inflation rate. An anonymous pensioner spoke to NewZimbabwe.com:
We usually get US$20 per month or ZW$92,000. NSSA alternates payments in US dollars and the local currency.
We got our yearly bonuses from NSSA last December comprising of US$20 and ZW$92,000 to make it just about US$29 on the black market.
No one can go through a month on that amount, no matter how much you try to save. There is little we can do about it.
This money is only meant for me to buy my electricity (voucher), a bit of food and hope for the best.
Pensioners face significant challenges as the cost of living in Zimbabwe continues to rise. With the country’s food basket reaching US$250 by August of last year, pensioners and their dependents are among the poorest in the country. The unpredictable economic climate, rampant inflation, and profiteering by businesses have made it difficult for them to survive. The Consumer Council of Zimbabwe (CCZ) has highlighted that shops deliberately increase prices, further reducing the purchasing power of pensioners’ already meagre income.
Zimbabwe is known for having some of the lowest-paid professionals globally, with average monthly salaries not exceeding US$500. The country has been grappling with a severe economic crisis for over two decades, leaving its government struggling to address the challenges faced by its citizens.
The purpose of a pension is to provide financial security during retirement by offering a steady income stream to replace earnings from work. Pensions ensure long-term financial planning, stability, and social security. They encourage individuals to save and invest for retirement, helping them maintain their standard of living and meet financial obligations. Pensions are often provided as an employment benefit, attracting and retaining employees while promoting loyalty and job satisfaction. But that’s not the case in Zimbabwe at the moment.
Employees contribute 9% (their 4.5% of their salaries plus 4.5% paid by the employer) towards pension. That means, an employee earning ZWL$170,000.00 will contribute (4.5%) = 0.045X $159,530.00 = $ 7,178.85. The employer contributes (4.5%) = 0.045 X $159,530.00 = $ 7,178.85. Total due (9%) =ZWL$14,357.70
If an employee earns US$500 (which was the average salary before October 2018), their monthly pension contributions would be US$22.50 from both the employee and the employer, totalling US$45.00. Therefore, if pensioners are receiving only about US$20 per month, it means they are getting less than half of the amount they used to contribute when they were working.