Banners
Banners
Banners
Banners

Universal and mandatory pension scheme proposed

Staff Writer
The high administrative costs of local commercial banks have been highlighted as one of the major detrimental factors that will hinder the introduction of the proposed broad-based occupational pension scheme for Botswana.

Various speakers at a workshop on developing the pension scheme organised by the Ministry of Labour and Home Affairs spoke of the need for administrative costs to be reduced for it to benefit the poor.

"Most employees in Botswana earn under the minimum wage", economist Dr Keith Jefferis said. "We will have to find innovative ways for the scheme to benefit low income earners."

In their recommendations, the workshop participants suggested for the government to engage and subsidise financial parastatals like the Botswana Savings Bank (BSB) and BotswanaPost to provide banking for the scheme.

Even though the administrative costs would initially go down if the government subsidises the scheme through parastatals like BSB, they will go up again once fund managers are roped in to run the fund.

The workshop, which was attended by government officials, fund managers and union representatives, raised pertinent questions, among them who should manage the fund, how the scheme should benefit the informal sector and how it will differ from the current schemes.

Investec Botswana CEO, Martinus Seboni, questioned how compliance would be managed, especially in the informal sector.

Jefferis, who was one of the facilitators of the workshop representing FinMark Trust,said there was a need for a law to ensure compliance for employers to contribute to the mandatory occupational pension scheme.

The workshop also recommended that after the scheme is drafted, the government should go on a comprehensive educational blitz to

Banners
educate employees on their entitlement and employers on how the scheme will be structured.

Jefferis also suggested that the government should conduct an impact assessment to see the possible negative impact if the scheme is introduced."Things like cost of employment might rise, putting some firms into informality," he said.

The workshop was the first consultative process since Parliament approved a motion that wanted the government to consider setting up a mandatory and broad-based national pension scheme for all workers last December.The motion was presented by Gaborone Central MP, Dumelang Saleshando, who reminded Parliament that there was presently no law that compelled employers to set up pension arrangements for their workers.

He argued that the high poverty level among old people was due to the fact that they had no capacity to generate income for themselves.

Parliamentarians were unanimous in their support for the motion. They pointed out that some unscrupulous employers had a tendency of dismissing their employees when they were close to qualifying for severance benefits, denying them the opportunity of getting their hard-earned dues.

Permanent Secretary in the Ministry of Labour and Home Affairs, Segakweng Tsiane, said the broad-based occupational pension scheme was going to be implemented during the National Development Plan 10(NDP10).

"After this workshop, we are going to engage employers because we want to enlist
their participation," she said."We will be working on a timeframe, not a pipeline," she said.



Banners
Banners

Selefu

Same Old News Again - SONA

Latest Frontpages

Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper Todays Paper
Banners