What is NAPSA, and what does it do?

The National Pension Scheme Authority (NAPSA) is a statutory body formed in February 2000 under the National Pension Scheme Act No.40 of 1996 of the Laws of Zambia. Its key responsibilities entail the following:

• Registering employees and employers
• Collecting contributions
• Enforcing compliance
• Investing funds
• Paying benefits to its members 

This scheme was primarily established to provide income security to members on account of retirement (old age), invalidity and death with a focus on adequate benefits and monthly pension payments in a better way than its predecessor, Zambia National Provident Fund (ZNPF). It’s also the official custodian and manager of ZNPF’s assets and manages funds contributed under the ZNPF scheme and pays benefits to eligible members. 

Who is Eligible for NAPSA Registration?

All workers in Zambia aged between 18 and 65 years and earning K15.00 and above gross monthly income are eligible for NAPSA membership registration. Below is a brief list outlining works that are supposed to be registered with NAPSA as per provisions in the NPS Act No. of 1996:

1. Employees on contract 
2. Employees engaged on permanent terms 
3. Employees on a part-time basis
4. Casual employees 
5. Non-Zambian employees engaged by local institutions 
6. Domestic workers
7. Public service workers 

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However, some employees are exempted from NAPSA membership. They include:

1. All workers aged 55 years and above 
2. Workers earning below K15.00
3. Members of the armed forces. Nonetheless, civilians engaged in the Zambian Armed Forces are eligible members of NAPSA.
4. Non-Zambians employed by international organizations or those with diplomatic status 

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In addition, employers who fall under the following categories are eligible for NAPSA registration:

1. The Government of Zambia, local authorities and statutory bodies
2. Non-governmental organizations, international organizations, multinational organizations and SMEs employing Zambian citizens
3. Individuals and households employing domestic workers 
4. Any other individual, institution, association or firm that has contracted another person for the provision of Labour

Note: The NPS Act stipulate that an employer should register within one month of starting a business or employing an eligible employee. 

How Should Workers Register as Members with NAPSA?

Registration of workers with NAPSA can be completed online through the eNAPSA portal or NAPSA Mobile App. The employers should do the registration of employees, and those in the informal sector or self-employed can register themselves on the same platforms. 

How to register as a member on eNAPSA?

1. Start by launching the eNAPSA portal and log in as a Super User.
2. Click the “Account Management” tab and proceed to the “Employee Management” option.
3. Complete the online registration form and submit the application.
4. When the application is approved, NAPSA’s system will send an SMS with the member’s Super User login credentials. It includes the account number, login ID and password.
5. With that, a registered user can log in and remit contributions online 

Alternatively, one could access and fill out the registration forms at the nearest NAPSA office.

What Percentage is NAPSA Contribution? 

The contribution rate for NAPSA is 10% of an employee's monthly gross income. However, an employee is mandated to contribute only half (5%) of their monthly contribution, and the employers add an equal amount (5%). 

It’s also worth noting that an employee’s gross monthly earnings are subject to the prevailing contribution ceiling in that particular calendar year. Besides, the contribution ceiling is revised annually and takes effect from January each year. For instance, upon revision of NAPSA’s contribution ceiling for 2023, the maximum monthly deductible employee contribution is K1,342.00, and employers should match the same to make a maximum monthly payable statutory contribution of K2,684.00. 

How and Where Can One Pay NAPSA Contribution?

To start with, NAPSA offers two payment channels for remitting contributions to the scheme, i.e. over the counter and electronic payments using mobile money and online banking platforms. Employers are mandated to deduct and remit their employees' contributions alongside monthly returns within 10 days of the calendar month to which earnings relate. 

Self-employed individuals can contribute using mobile money (USSD code *677#) or NAPSA Agent. 

How Can I Check My NAPSA Contributions?

Members can check their NAPSA statements or contributions by dialing the USSD code *677#. However, the phone number used must be registered with NAPSA. 

Employers can check company statements using eNAPSA online platform. 

Are There Penalties for Non or Late Payment of NAPSA Contribution?

Yes, there is a penalty for non or late payments of NAPSA contributions: it’s a 10% cumulative penalty. 

What Benefits Does NAPSA Offer?

NAPSA offers three principle benefits and a funeral grant on top of that. Here are the benefits:

1. Retirement benefits: it’s paid to members who have attained the retirement age of above 55 to 65 years old and have made at least 180 months of contribution. A registered member with less than 180 months of contributions is only eligible for a Retirement Lump sum.
2. Invalidity benefits: it’s paid to a registered member who gets incapacitated and unable to engage in gainful employment due to illness or injury. A member must have at least 60 months of contributions to be eligible for the Invalidity Pension. Also, 12 of the contributions should be within 36 months of becoming invalid. Members with less than 12 months of contributions within 6 months or have less than 60 months of contributions are eligible for the Invalidity Lump sum.
3. Survivor’s benefits: it’s paid to the spouse(s) and children of a registered member if that member passes away. This particular benefit is called Survivor’s Lump Sum. Suppose a retirement or invalidity pensioner dies; their spouse(s) and children are eligible to receive a Survivor’s Pension. The appointed administrator is eligible to receive a survivor’s lump sum if there is no spouse or children. 
4. Funeral grant: it’s paid to a spouse or administrator when a registered member dies. It’s aimed to cover the cost of the funeral. However, the deceased member must have at least 12 monthly contributions during the last 36 months of their life. If an eligible invalidity or retirement pensioner dies, they’re also eligible for the funeral grant, irrespective of their contribution.

How are NAPSA Benefits Calculated in Zambia?

Each benefit is calculated differently based on certain components. Below is a summary.

For normal retirement and survivor’s pension benefits:

1. Salary 
2. Replacement rate

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For lump sum benefits:

1. Total employee and employer contributions 
2. Index amount 
3. Interest amount 

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For early retirement pension benefits:

1. Salary 
2. Replacement rate
3. Number of months between early retirement and attainment of normal retirement 

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For invalidity pension benefits:

1. Salary 
2. Number of years lost from work due to invalidity 
3. Maximum and minimum monthly pensions

Note: NAPSA pension doesn’t remain the same over the years: it’s adjusted annually in line with changes in National Average Earnings (NAE) due to wage inflation. 

What is the Lowest Pension NAPSA Pays?

NAPSA offers minimum monthly retirement or invalidity pension payable in a given year. It’s 20% of the NAE applicable in the year of retirement or invalidity.

How Long Does It Take to Receive NAPSA Benefits Upon Filing a Claim?

If all records are complete, benefits should be settled within 21 days after filing a claim in the nearest NAPSA office.

References 

1. https://napsa-web04.azurewebsites.net/claims-faq/#:~:text=NAPSA%20law%20provides%20for%20a,from%20the%20Central%20Statistical%20Office.
2. https://napsa.co.zm/calculating-benefits-faq/#:~:text=Early%20retirement%20pension%20benefits%20are%20determined%20using%20the%20following%20components,and%20attainment%20of%20normal%20retirement
3. https://lenvica.com/national-pension-scheme-authority-napsa-zambia/
4. https://www.ilo.org/wcmsp5/groups/public/---africa/---ro-abidjan/---ilo-lusaka/documents/publication/wcms_822656.pdf