LASF PAYS OVER 5,000 PENSIONERS
- August 10, 2020
- Posted by: kalaluka
- Category: Uncategorized
The Government of the Republic of Zambia though the Ministry of Finance released K251
million to the Local Authorities Superannuation Fund (LASF) for the purpose of paying
retirement benefits and pensions to pensioners. The amount released by Government is meant for
reducing pension liabilities which had accumulated over time arising from the actuarial deficit.
The funds were released to LASF on 25 th September 2019 and payment of the said funds to the
pensioners commenced in October, 2019.
The Government of the Republic of Zambia has given priority to ensuring that the unpaid
retirement benefits to pensioners is addressed as evidenced through an increased allocation in the
2020 National Budget under the Social Protection and Dismantling of Arrears. The
Government’s resolve to address the problem of pension arrears was cemented by the President
in his address to Parliament as well as the Minister of Finance.
In response to Government’s vision, LASF has put up measures aimed at supplementing
Government’s vision to ensure that all retirees are paid. In the Five Years Strategic Plan, LASF
identified the improvement of the financial position by adopting various measures such as
seeking Government being the principal shareholder to capitalise the actuarial deficit, restructure
its investment property portfolio into high yielding instruments. Other measures implemented
include enhancing compliance with employers to remit the monthly pension contributions
through negotiations of payments plans and land debt swaps as an option to restructure the
pension contributions arrears. Employers who have not responded to the measures are being
taken to Courts as a last measure to recover the pension contributions arrears.
At the time the funds were released, LASF was owing its pensioners a total of K572.40 million
in form of unpaid lumpsum benefits and pensions. LASF therefore wishes to take this
opportunity to inform the nation that a total of 5,424 retirees benefited from Government funding
and we are looking forward to paying more pensioners during the year. During the disbursement
of the K251 million, the Fund focused on paying the benefits in full for those pensioners who
retired as back as 2013 and 2014 and applied the first in first out formula when effecting the
payment. Though the funds were not adequate to pay all the pensioners in full, the strategy was
to pay as many as possible ensuring that at least every pensioner was paid an advance that could
assist in mitigating the challenges they face in retirement.
The breakdownof the 5,424 retirees is as follows: a total of 1,590 retirees were paid their
lumpsum benefits with 1,024 retirees being paid in full while 566 were partially paid at a total
cost of K199,083,824.43. A further 3,711retirees were paid annuities broken down as 3,020 paid
in full while 691retirees were partially paid bringing the total payment for annuities to
Due to the Fund’s delay inmaking timely payment to the retirees at the time they retired, a
number of them had decided to engage Lawyers and therefore part of the payments went to settle
claims which were under litigation. Therefore a total of 123 retirees were paid under the legal
category. Of these 75 were fully paid while 48 were partially paid at a total cost of K24,
I would like to inform our retirees that the LASF Board and Management have continued to
engage Government through the Ministry of Local Government and Ministry of Finance on
modalities of how finance the benefits and pensions in 2020 to mitigate the impact of the Corona
virus. In the short term, the focus will be to continue ourcommitment in addressing the plight of
our senior citizens as broader pension reforms are being undertaken. In the medium to long term,
the pension reforms being undertaken will address the parametric and systemic changes to the
scheme design aimed at improving thelong-term financial sustainabilityand the legal framework.