Deferring paying monthly bills results in the amounts owing accumulating until the bill, which might have initially been for a relatively modest sum, becomes almost impossible to manage.

This is a common experience for many people, some of whom have in the past run up huge utility bills until eventually service is disconnected.

The same problem has been experienced by organisations, both big and small, that have continually put off remitting to NSSA their national pension scheme contributions until the sum owing becomes so immense that they are unable to pay it.

Looking through newspaper reports published last year, one comes across reports of some large organisations, including parastatal organisations and local authorities, owing NSSA hundreds of thousands of dollars and even millions of dollars.

In one case an organisation that owed NSSA more than $4 million reportedly wanted the debt converted to a loan.

The lesson is clear. Remit payments to NSSA when they are due. There is a legal requirement for all formal sector organisations to do this.

It also makes good business sense to remit payments on time in order to avoid accumulating arrears of unmanageable proportions.

After all, half of the 7 percent of employees’ insurable earnings that should be remitted to NSSA is contributed by the employees.

It is deducted from their wages. To fail to pay to NSSA money that has been deducted from an employee’s wages amounts to misappropriation of the employees’ money.

Despite the fact that it is a statutory obligation for every formal sector employer, apart from employers of domestic workers, to register with NSSA, ensure employees are registered with NSSA and remit each month to NSSA the employees’ and employer’s combined contribution to the national pension scheme, the compliance rate was estimated to be only 56 percent in 2013.

Although that was a better percentage than in the previous two years, it is nowhere near the 100 percent compliance which should be the case if every organisation is complying with its legal obligations.

When employers fail to remit contributions to the national pension scheme and Workers’ Compensation Insurance Scheme, they are not only amassing arrears that may result in legal action and garnishing orders but they are inviting the imposition of financial penalties on top of what they owe.

A number of employees have written to this column alleging that their employer is not forwarding to NSSA their pension scheme contributions.

While these allegations will invariably be passed onto NSSA, it is best for employees who believe their employer is not remitting their contributions to contact their local NSSA office about this.

Employers who have already run up substantial contribution arrears would be well advised to contact their nearest NSSA office to propose a payment plan and ensure that all future contributions are paid on time.

When contributions are not remitted at the correct time, which is by the 10th day of the month following the month in which employees’ pension contributions are deducted from their wages, then the employer may be tempted to utilise the employees’ contributions for some other purpose. This is what tends to lead to the huge payment arrears that some organisations accrue.

The monthly contributions are modest. The employer’s contribution to the pension scheme, which is the same as the employee’s contribution, is only 3,5 percent of each employee’s insurable earnings.

Since there is currently a monthly insurable earnings ceiling in place of $700 per month, the maximum contribution from the employer in respect of any individual employee would only be $24,50.

That would only be for employees earning $700 per month or more. For those earning less, the contribution would be less. For instance, for someone earning $300 the contribution would only be $10,50.

Workers’ Compensation Insurance Fund premiums, which are paid by the employer alone, are a small percentage of each employee’s earnings. It is important these are paid, as accidents can occur at any workplace at any time.

If over a lengthy period substantial arrears to the pension fund have accumulated and the employer is unable to pay at least half of those arrears, then that would suggest that the employees’ contributions have been used for some other purpose. In other words, they have been misappropriated or, to use a somewhat harsher term, been stolen.

That money belonged to the employee, who allowed it to be deducted in the belief that it would be paid to NSSA.

Employers who fail to remit monthly pension scheme contributions and Workers’ Compensation premiums to NSSA are acting illegally.

They are possibly jeopardising their employees’ retirement benefits and leaving their employees without the Workers’ Compensation insurance cover to compensate them in the event of their being injured at work or contracting a work-related illness.

Since pension scheme contributions and Workers’ Compensation Insurance Fund premiums are a relatively small amount compared to the total wage bill, it is likely that most employers who fail to meet their NSSA obligations do so as a result of a poor compliance culture rather than an inability to pay.

Nevertheless, cognisant of the difficult operating environment, NSSA always engages defaulting employers in the first instance. Court action and garnishee orders are a last resort.

The problem of facing such drastic action can be avoided by simply ensuring that the monthly payments that are due to NSSA are paid to it by the 10th of each month. That way unwieldy bills that are difficult to pay will not accumulate.

Talking Social Security is published weekly by the National Social Security Authority as a public service. There is also a weekly radio programme on social security, PaMhepo neNSSA/Emoyeni le NSSA, at 6.50pm every Thursday on Radio Zimbabwe and Friday on National FM. Readers can e-mail issues they would like dealt with in this column to [email protected] or text them to 0772-307913. Those with individual queries should contact their local NSSA office or telephone NSSA on (04) 706523/5, 706545/9, or 799030/1.

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