The Ministry of Labor and Social Security (MLSS) has decided to take initial steps towards a national pension scheme. The Cooperating Partners (CPs) have agreed to support this endeavour through funding of a “Social Pension Inception Phase” of 18 months.


The inception phase will build upon the design and experiences of the existing pilot pension scheme in Katete. The scheme has been in existence since 2007 and currently covers approximately 4,000 individuals aged 60 years and above and provides a cash benefit of K60,000 per month. During the inception phase, the MLSS will formally assume responsibility for the Katete scheme, which is currently supervised and managed by the MCDSS.

During the inception phase, the MLSS will develop the design and implementation plan of the scheme and will submit the proposed scheme design and implementation plan to the general public and government for debate and approval. Upon approval it is expected that the implementation of the social pension would then begin in 2012.

The overarching purpose of the pension scheme is to reduce poverty by improving the living standards of the aged and those living in the same household. A social pension scheme would comply with the goals of the Fifth and Sixth National Development Plans. Furthermore, it integrates into the general social protection policy of the GRZ, which also includes the expansion of cash transfers to other vulnerable groups and which is currently managed by the MCDSS.

The workplan and budget presented in this document covers a period of 18 months, from June 2010 until November 2011. It is consistent with the Joint Financing Agreement on the “Zambia Social Protection Expansion Programme”, which has been signed between the GRZ and the CPs. The overall responsibility for the work described in this document is with the Department for Social Security of the MLSS, which will coordinate closely with the CPs (in particular DFID, UNICEF, Ireland Aid and ILO

Areas of Work

The inception phase will focus on the following areas of work:

1. Capacity development of MLSS, in particular with regards to training of staff and provision of additional staff  involved in the inception phase

2. Technical design of the social pension scheme, including policy, legal, institutional and managerial aspects

3. Assessment of the institutions involved in the possible implementation of the social pension scheme and development of an institutional strengthening plan

4. Takeover of the responsibility for the scheme in Katete District by the MLSS


Summary of Budget and Workplan

Below is a table showing the summary of the budget:

 Budget for entire inception phase (18 months)



 Totals (K)

 Totals ($)


Administrative arrangements, recurring cost and capital goods procurement




Capacity assessment and development for MLSS (Technical Assistance, Trainings and Study Tours)




Advocacy (strategy development, events, field tours, media)




Scheme design (technical assistance, events, field tours)




Assessment of institutions and development of institutional strengthening plan




Takeover of Katete scheme




Monitoring and Evaluation




Contingency Reserve (10%)








Inception Phase

Administrative Arrangements
A social pension team will be established at the Department for Social Security (DSS) of the MLSS and will manage the inception phase. The team is led by a Principal Social Security Officer, who is also acting as the Social Pension Desk Officer and reports to the Director of Social Security. Other staff members of the DSS will be contribute a certain proportion of their working time to the SPS.
The opening of a dedicated bank account was required to separate Co-operating Partners (CPs) funding for the inception phase from the other accounts of the MLSS. The budget line for social pension in the MLSS budget will likely to have a small allocation in 2011 but would be filled when implementation commences in 2012.


Capital Goods Procurement
The equipment required for the Social Pension Scheme (SPS) office (in addition to equipment already available at the MLSS) will be procured by the CPs. The recurring operational cost of the social pension team includes office consumables as well as an allocation for transport (fuel, lubricants) for study and research tours, e.g. to Katete District.


Capacity Development for MLSS

In-house Capacity Assessment and Development Plan
The DSS will establish an overview of the currently available technical and managerial capacities within the department in particular and, more broadly, at the MLSS. The capacity assessment will be the basis for identifying training or other capacity development requirements for individual staff members.

Training and Study Tours
Staff members of MLSS have already attended trainings and capacity development events since the Joint Financing Agreement was signed. The Social Pension Scheme Desk Officer at the DSS attended the World Bank Training on “Impact Evaluation of Social Protection” in Ghana in May 2010, three officers attended a Help Age International South-South Learning Event on Social Protection for Older People in Kenya in June 2010 and seven MLSS officers completed the training course on Designing and Implementing Social Cash Transfers in South Africa in August 2010.
Further trainings are required to build appropriate technical and managerial capacity at the MLSS.  Training on Monitoring and Evaluation will ensure appropriate M&E of the inception phase as well the later implementation and management of the SPS. Project Management Training is required to build requisite capacity for efficient and effective management of the inception phase and the SPS implementation. Financial Management capacity needs to be strengthened to ensure transparent and effective accounting and budget management. Public Relations and Advocacy is particularly important during the inception phase in order to obtain broad public support for the SPS and achieve the approval of the government for the SPS.

The trainings can take place in Zambia, in an African country or outside Africa. Depending on the location of the training, the expenses for travel and per-diem as well as for course fee differ significantly. The expense assumptions used for the budget were determined on the basis of information about the cost for the trainings already attended, the per-diem rates of the GRZ and the UN and typical course fees in Zambia and abroad. It was assumed that more than half of all courses would take place in Zambia, one third in Africa. On the basis of these assumptions, the following expenses were budgeted: course fee US$ 1750; per diem US$ 210 per day; travel allowance of cost of air ticket US$ 560. Further, it was assumed that each training would last for about two (2) to three (3) weeks and would be attended by two officers.
Study tours to Katete and to other Southern African countries will enable the MLSS and key personnel from other ministries to deepen their understanding of the design, operations and impact of social pension schemes. The tour to Southern African countries is likely to cover Namibia and South Africa, because these countries currently have social pension schemes in different stages of development.



Political Activities
The approval of the National Social Security Policy would give the MLSS the official mandate to design and submit for approval a national pension scheme. The process for this approval involves a cabinet memorandum, which the MLSS sends to all ministries with a request for comments. The final version of the cabinet memorandum, which includes the comments, is then eventually forwarded to Cabinet Office for consideration.


Advocacy Strategy
Successful design and approval of the scheme also requires comprehensive information and engagement of all relevant stakeholders. An advocacy strategy will be developed by a technical assistance provider in order to identify the stakeholders, develop the relevant information material and determine the appropriate interventions.

Advocacy events
This includes a seminar with politicians (e.g. members of parliament) and other key individuals involved in the political decision-making (e.g. Permanent Secretaries, senior civil servants). This event is likely to attract significant media coverage, thereby also informing the general public about the scheme design. Considering the high profile of the event’s participants and the need for presenting a strong case for social pension, it is planned to contract a senior representative from academia or the government of another country to give a keynote speech on social pension.
In addition to this event, the social pension scheme will also be presented and discussed at the advocacy workshop included in the workplan of the MCDSS.
The MLSS will organise a workshop on social pension for representatives from all relevant civil society organizations. The aim of the workshop is to discuss options for scheme design and its implementation and to obtain input and feedback.

The social pension scheme is likely to attract significant media interest, because of the relevance of a pension scheme for the general public. It is, therefore, important to ensure that media representatives have comprehensive and correct information on the principles of social pension, the concept envisioned by the government and the ongoing design process.  Therefore, media briefing for representatives from newspapers, radio and TV will be organized.

Field Tours
Field Tours will provide key political decision makers and senior civil servants with a first-hand impression of the impact, setup and management of pensions. The heads of Parliamentary Commissions, permanent secretaries and ministers as well as Directors of key ministerial departments and leading politicians will be invited to a field tour to Katete. The tour is planned to spend one full day in Katete district, with additional meetings possible after arrival on the first day and before departure to Lusaka on the morning of the third day.
A study tour to a Southern African country (Namibia, South Africa or Lesotho) is being planned for up to 10 key political and administrative decision makers. The tour aims at providing an exposure to already existing pension schemes, to discuss key managerial and political aspects with senior management and politicians in the host country and to see the impact of the pension. The tour will spend two full days in the country (with, possibly, the second day in the field).


Publicity material and media programs
Various advocacy material and programmes will be produced to provide information and visibility on the pension scheme. Early in the inception phase, a background document will be commissioned, in order to summarize the existing state of social pension in Zambia, including information on the Katete pilot scheme. The budget makes a provision for producing prints of this paper and further information material (including editing work).
Furthermore, visual media will be used to inform the general public and key stakeholders. This includes the production of a documentary DVD, which assembles existing video on social pension (e.g. from the Wahenga network). Additionally, the national TV station will be commissioned to produce and broadcast a TV interview with the Minister of Labor and Social Security on the proposed social pension scheme.


Scheme Design

Designing the social pension scheme is the core of the inception phase. It is linked closely to the advocacy and approval activities and is mutually complementary to other inception phase components. Scheme Design will involve significant technical assistance, because of the complexity and technicalities involved.
Therefore, a Design Team will be established which will oversee the design process. The team will be composed of officers and senior staff of the MLSS, but also representatives of other Ministries (e.g. Finance, Community Development and Social Services, social partners and senior citizens). It will meet regularly (at least monthly) to discuss current activities and results.
The inception phase aims at obtaining approval of the government for the introduction of a social pension scheme. If this approval is given, the CPs would consider financing the implementation of the scheme, provided a new financing agreement and implementation plan is agreed between the GRZ and the CPs.

Technical Assistance
The Ministry of Labor and Social Security (MLSS) requires technical assistance (TA) for some aspects of the inception phase of the Social Pension Scheme (SPS). TA is needed for the conceptual design of the SPS (which will then submitted to approval by the political decision makers) and for the eventual implementation of the SPS.
The conceptual design requires two major TA assignments:

The review and development of the legal framework for the SPS will support the MLSS in developing a proposal for the required adjustments and additions to existing legislation and regulation. This proposal would be submitted to the government for approval at the end of the inception phase.

The first step of this TA assignment is a review of the relevant existing laws and regulations and the identification of required adjustments and additions. This review will employ a broad approach of deskwork by the consultants and consultations with individual stakeholders (e.g. MLSS, Ministry of Justice, academics and legal professionals). In a second step, the consultants will facilitate a taskforce of stakeholders from (mainly) government and academia to formulate options for the identified adjustments and additions. The consultants will provide input on relevant legislation and regulation in other countries. If required by the MLSS, the consultants could also formulate the actual draft bills and regulations, based on the work of the taskforce.

The development of the legal framework is dependent on decisions by the MLSS on scheme design features such as targeting, payment modalities and governmental supervision of the scheme. Therefore, the TA work must be synchronized with the, for example, the financial and actuarial valuation of the SPS and other TA assignments. An overview of the critical dependencies of the TA assignments is provided in the annexed table.
The initial review of the legal framework should take place in 2010, while the more detailed work on proposed legal changes is would probably begin in the 2nd quarter of 2011.

The actuarial and financial valuation of the SPS will serve as a comprehensive analysis of the public finance and budget implications of establishing this scheme. It would be possible to extend the TA assignment to also include an analysis of the likely microeconomic impact (ie poverty impact) of the SPS.
The first step of the TA assignment is to formulate options on targeting (ie size of the beneficiaries group), benefit level and rollout (ie number of districts to be covered in each phase of the implementation). Also, the data required for the analysis would need to be updated and/or collected at this stage.
The consultants will then calculate the desired projections and information and present these in a comprehensive report. The results of the assignment and the subsequent decisions of the government on the scheme design will have impact on the development of the TA work on the legal framework. These linkages are presented in the annexed table.
The TA work could take place in 2010, but it might be worthwhile to wait for (preliminary) results of the national census. Otherwise, the calculation models should allow for easy updating with the Census 2010 numbers (a second, small instance of TA could be contracted in 2011 for this work).The implementation planning for the SPS requires two further assignments:

The development of the management and administration processes of the SPS will be based on the existing arrangements of the pilot scheme in Katete. The TA assignment will review these arrangements, with a view to adjusting them towards the scheme design proposed by the MLSS and the envisioned national scale of the scheme. The main output of the TA will be a manual of operations, which will provide guidelines and standards for the management of the SPS.

The TA depends on prior decisions by the MLSS on the proposed design of the scheme. The above-mentioned actuarial and financial valuation must be fully completed before the TA assignment. The development of the legal framework must be at a stage where the fundamental decisions on the proposed legislation and regulation have been taken. Therefore, the TA assignment will not take place before the third quarter of 2011.
The development of the Management Information System (MIS) concerns the definition of a centrally managed system for monitoring the performance of the SPS. The MLSS will (likely) be the responsible ministry for the SPS and must, therefore, be able to receive and compile up-to-date information on the management and effectiveness of the scheme. The TA assignment will analyse the governments information needs and then develop a framework of indicators and data sources. Furthermore, the TA will identify information technology suitable to continuously provide the required information.
The execution of the assignment should be aligned with the TA on the development of management and administrative processes. Data collection will be incorporated in the management of the SPS and therefore must be reflected in the manual of operations. Therefore, the TA will also take place in the third quarter of 2011.

Stakeholder engagement
During the design process, extensive stakeholder consultations and visits to the programme areas (particularly the existing scheme in Katete) are necessary to discuss and evaluate design options. The budget and workplan provides for two consultative workshops with a broad range of stakeholders. The workshops aim at discussing design options (first workshop) and to validate the final draft design. The complexity of the legal framework required for the scheme requires intensive work of legal experts and government representatives (e.g Ministry of Justice, but also Parliament) on formulating the required laws and regulation. Therefore, the budget includes two workshops of legal experts and lawmakers. Furthermore, the budget provides for two research and fact-finding tours to Katete district, which will be used by technical assistance consultants to verify data and information and to evaluate design options.
The team will be composed of Ministry of Labour staff members, one external and one local expert attached to the Ministry from the International Labour Organisation. International expert has already been attached. Local expertise will have to be engaged within the framework of the broader technial assistance for the design.
A design team of about 4 – 7 people will be constituted by the Ministry of Labour and Social Security to spearhead the design process. In collaboration with the CPs and Management Agent, the team will be responsible for spearheading the design mission by co-ordinating the engangement of the right consultants to undertake various components of the design at appropriate times. The design team will also take up the lead role for drafting the ToRs for the respective consultancies.

Considering the government’s fiscal contraints, there shall be need for support from the CPs in scaling up the social pensions once the inception phase has been concluded. However, it is necessary within the inception phase to agree on the financing plan and an implementation plan for the scale – up to ensure a smooth transition from inception phase to scale up stage.


Institutional Capacity Assessment and Strengthening Plan

The implementation and management of the social pension scheme is a complex undertaking, for which no single organization or government authority would have all the required skills. Therefore, an assessment of all potential actors in social pension will be conducted during the inception phase. The assessment will determine the individual strengths and capacities of the organizations and will suggest, which organizations could take over which role in the social pension scheme. The organizations to be reviewed will not only include government authorities, but also civil society organizations, NGOs and private enterprises.
It is likely that most organizations identified for taking a role in the social pension scheme will require interventions aiming at strengthening their management skills and institutional capacity. The assessment will also outline the interventions required for this.
TA will be contracted to execute the assessment. This involves four trips to organizations in various parts of the country, in order to get a broad understanding of the institutional capacity.


Takeover of Katete scheme

The MLSS will formally assume responsibility for the Katete scheme during the inception phase. However, the operations in Katete will continue in the current setup until the (potential) implementation of a social pension in 2012.
The Katete pilot scheme has been operational since 2007 and a baseline survey was conducted at its inception. It is proposed to conduct an impact evaluation of the scheme during the SPS inception phase
During the inception phase, the MLSS and the MCDSS will make agreements on the practical, administrative modalities of a handover of responsibility. This opportunity of a review of the setup will also include an evaluation and synthesis of the lessons learnt from the Katete scheme. The agreed takeover modalities will have to be approved by the PSs and Ministers of both MLSS and MCDSS.


Risks and Limitations

The workplan currently foresees that the approval of the social pension scheme will be discussed among the politicians (e.g. members of parliament) and the government (ministers, cabinet office) in the second half of 2011. This period coincides with election campaigning and the national election. Therefore, a significant risk exists that the advocacy and approval process becomes politicized for election campaigning and, also, that the approval of the scheme is decided by the outgoing government.
It will be important to review the workplan in light of these risks closer to the election (i.e. in October 2011) and to consider postponing approval and main advocacy events until after the election. This would require a (no-cost) extension of the inception phase until 2012.

Further assignments may be required, but are not known yet and are, hence, not included in the budget and workplan. The contingency reserve included in the budget will be used to fund these assignments.





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