GOVERNMENT UNVEILS SUPPLEMENTARY PENSION REFORMS TO IMPROVE LUMP SUM BENEFITS

GOVERNMENT UNVEILS SUPPLEMENTARY PENSION REFORMS TO IMPROVE LUMP SUM BENEFITS

Lusaka, Zambia 12th November 2025 -Government has announced a comprehensive package aimed at strengthening Zambia’s pension system and improving access to lump sum benefits, while maintaining the sustainability of the National Pension Scheme Authority (NAPSA) and ensuring income security for retirees.

Minister of Labour and Social Security, Brenda Mwika Tambatamba, MP, said the reforms are designed to give members more flexibility and options at retirement, without compromising their long-term income security in form of monthly pensions that protect retirees from poverty in old age.

The Minister was speaking in Parliament today, in response to a private members’ motion moved by Kanchibiya member of Parliament, Sunday Chanda who proposed that Government reforms the retirement benefit structure under the National Pension Scheme Authority (NAPSA), to give contributors an option of accessing lump sum payments upon retirement.

Among the key proposed measures are increased flexibility lumpsum access. The current 20% partial withdrawal benefit will be expanded to allow members to access this amount at retirement as a lump sum.

Government is also considering on increasing the percentage beyond 20% to enhance members’ financial flexibility at retirement.

Another measure is that a voluntary sub-scheme will be introduced under NAPSA to allow members to make extra contributions beyond the mandatory rate. The extra savings will entitle members to access additional lump sum benefits upon retirement.

Government is also introducing a Second-Tier Pension for Civil Servants. Civil servants such as teachers and health personnel employed after 2000 who currently only contribute to NAPSA, will be allowed to also contribute to the Public Service Pensions Fund (PSPF) while workers under local authorities and utility companies will contribute to Local Authorities Superannuation Fund (LASF).

This will create a two-tier system where NAPSA serves as the first pot and PSPF or LASF as the second, enabling civil servants to access up to 40% lump sum benefits.Other measures are the promotion of Private Occupational Schemes.

Government is encouraging employees in the private sector to either create or join existing occupational pension schemes under the Pensions and Insurance Authority (PIA), as over 230 Private Occupational schemes already provide lump sum options for employees.

Ms. Tambatamba emphasized that the reforms are anchored on sustainability and global best practices, in line with International Labour Organisation (ILO) Convention 102, which permits lump sums under regulated conditions to protect retirees’ monthly income.

She disclosed that the reforms are nearing completion and Government will undertake further consultations in all the provinces, prior to presenting them to the Tripartite Consultative Labour Council (TCLC) and ultimately Cabinet for approval.

“Our goal is to build a pension system that is inclusive, sustainable, and responsive to the needs of all Zambians,” said Ms. Tambatamba.

Issued by:

(Original Copy Signed)

Mwaka Ndawa(MS)

Principal Public Relations Officer

Ministry of Labour and Social Security