NEW PENSION REFORMS-A MILESTONE IN THE TRANSFORMATION OF PENSION ADMNISTRATION IN ZAMBIA.
By PSPF Corporate Communications
Unit.
Public Service Pensions Fund (PSPF)
Director General Mr. Francis Pindani Nyirenda has described the Public
Service Pensions Act No. 73 of 2026 signed by President Hakainde Hichilema as a
significant milestone in the transformation of pension administration in
Zambia, aimed at strengthening pension administration, improving governance,
and ensuring the long-term sustainability of the Public Service Pensions Fund.
Speaking during a media briefing
held on Thursday, 25 June 2026 at Pension House in Lusaka, Mr. Nyirenda said
the existing Public Service Pensions Scheme (PSPS) will continue to operate and
that benefits for current members and pensioners will not be affected in line
with Article 187 of the Laws of Zambia.
The Director General has assured
existing members and pensioners that their accrued pension rights remain fully
protected following the enactment of the Public Service Pensions Act No. 73 of
2026.
He stated that the reforms were
introduced to establish a new pension scheme for public service employees who
were unable to join the existing pension scheme after the year 2000, promote
equity and fairness in pension benefits across the public service, and
strengthen governance and management structures in line with international best
practices.
The Director General further
revealed that under the new legal framework, PSPF will administer two pension
schemes namely the existing Public Service Pensions Scheme (PSPS) and the newly
established Occupational Pension Scheme (OPS).
He said the Occupational Pension
Scheme will be mandatory for eligible public service employees who are not
members of the existing scheme or the Local Authorities Superannuation Fund
(LASF).
Mr. Nyirenda explained that under
the OPS, the contribution rate will be 6.5 percent of an employee’s gross
salary, shared equally between the employee and Government at 3.25 percent
each.
He also stated that the new Act
introduces flexible retirement options including early retirement at 55 years,
normal retirement at 60 years, and late retirement at 65 years.
Mr. Nyirenda added that members who
meet the qualifying period of 15 years will be entitled to both a lump sum
payment of 40 percent and a monthly pension upon retirement.
“The reforms further introduce progressive provisions such as portability of pension benefits and voluntary pension contributions aimed at enhancing retirement benefits for members. The portability provision will allow employees to move between institutions or pension schemes to transfer their accrued pension benefits without losing their retirement savings. Mr. Nyirenda explained.
The Director General further
announced that members under the Occupational Pension Scheme will now have
access to loan facilities previously a preserve for members of the existing
Public Service Pensions Scheme. These include the Home Ownership Scheme and the
Microfinance Scheme aimed at economically empowering members.
Mr. Nyirenda said the reforms
demonstrate Government’s commitment to protecting the welfare of public service
employees both during their active years of service and in retirement.
He further noted that the reforms
establish a mandatory two-tier pension system under which eligible public
service employees will have dual membership in both the National Pension Scheme
Authority (NAPSA) and the Occupational Pension Scheme administered by PSPF.
“Under this arrangement, NAPSA will
provide the first-tier basic pension targeting an income replacement ratio of
45 percent, while the Occupational Pension Scheme under PSPF will provide a
second-tier pension targeting an additional 20 percent. The combined two-tier
pension system is expected to deliver a total income replacement ratio of 65
percent, thereby improving retirement income security for public service
employees”. He said.
0n 4th June 2026, President of the Republic of Zambia, His Excellency Mr. Hakainde Hichilema, assented to three Pensions Bills, amongst them was the Public Service Pensions Act No. 73 of 2026 effectively repealing and replacing the Public Service Pensions Act No. 35 of 1996.