UNDERSTANDING YOUR BENEFITS WITH THE PUBLIC SERVICE PENSIONS FUND (PSPF)

By Joseph Banda 

The Public Service Pensions Fund (PSPF) is a defined benefit scheme established by an Act of Parliament (Cap 260 of the Laws of Zambia Act Number 35 of 1996). The Fund provides benefits to Public Service Employees, drawing its membership from the following:

 Teaching Service

 Zambia Police Service

 Zambia Correctional Service

 Defense Forces

 Civil Service

 Judicial Service

 Zambia Security and Intelligence Service 

The Fund pays a range of benefits to retired Public Service Employees and Beneficiaries of the deceased estate. To qualify for full pension benefits (lump sum and monthly pension benefits), 10 years of contributions (pensionable service) is required, subject to the mode of exit from the Public Service. The benefits include.

Retirement Benefits:

1. Normal Retirement (Age 60): Upon reaching the statutory retirement age of 60, public service employees who have ten years or more of pensionable service are entitled to both lump sum and monthly pension benefits. However, if the Employee has less than ten years of pensionable service, what is payable is a refund of contributions. Benefits are calculated based on the employee's last annual salary, length of service in months, and age at retirement.

2. Early Retirement (Age 55): Public Service employees who opt to retire at 55 and have ten years or more of service are entitled to both full pension benefits. Notably, members of the Defence Forces, Police Employees (up to Chief Inspector), and Correctional Service Employees (up to Chief Employee III) may on giving notice retire at 45 years of age or after 20 years of service, whichever is the earlier. However, if the Employee has less than ten years of pensionable service, what is payable is a refund of contributions. Benefits are calculated based on the employee's last annual salary, length of service in months, and age at retirement.

Benefits for Leaving Service Before Retirement:

3. Resignation, Discharge, or Dismissal: employees who leave the public service before qualifying for retirement due to resignation, discharge, or dismissal are entitled to a refund of their total pension contributions along with interest accrued at the Bank of Zambia (BoZ) rate, multiplied by the number of full years of contribution. 

Benefits Due to Medical Reasons:

4. Medical Retirement: Public Service employees who are retired due to ill health, supported by sufficient medical evidence of permanent incapacity, are eligible for both lump sum and monthly pension benefits. However, those with less than ten years of service, a lump sum equivalent to their total contributions plus interest at the BoZ rate is provided. Benefits are calculated based on the employee's last annual salary, length of service in months, and age at retirement. Medical retirement not attributed to own fault includes compensation benefits and medical retirement due to own fault exclude compensation benefits.

Death Benefits:

5. Death in Service (Less than 10 Years): If a Public Service employee dies with less than 10 years of service, the estate is eligible for special death gratuity (equivalent to annual pensionable emoluments) plus refund of contributions with interest (at the prevailing BoZ rate).

6. Death in Service (10–20 Years): If a Public Service Employee dies after completing ten or more but fewer than twenty years of service, a death gratuity equal to their annual pensionable emoluments is paid. Additionally, if the deceased employee, leaves a spouse and/or children under the age of 18, benefits include monthly pension for the spouse until death or remarriage and children until the age of 18 years. If a Public Service Employee dies without a spouse or children under 18, the estate is entitled to refund of contributions and a special gratuity.

7. Posthumous Retirement (20+ Years): Public Service Employees who die after completing twenty years or more of service are considered to have retired immediately before their death and their benefits are calculated based on the employee's last annual salary, length of service in months, and age in months at retirement. Additionally, If the deceased leaves a spouse and/or children under the age of 18, both the surviving spouse and children will receive a monthly pension for life or until remarriage for the spouse and until the age of 18 years for the children.

8. Monthly Pension for Surviving Spouse and Children (Under 18 Years): If a Public Service Employee with 10 or more years of service dies, benefits for survivors include monthly pension for spouse until remarriage or death and children under 18 until they reach age 18 years 

Other Retirement Types:

9. National Interest Retirement: This applies to Public Service Employees retiring under Section 39 of the Public Service Pensions Act due to the abolition of their post or to improve efficiency in government operations. Benefits are calculated based on the employee's last annual salary, length of service in months, and age in months at retirement.

10. Public Interest: The Public Service Employees retired in the public interest with 10 or more years of service are eligible for both lump sum and monthly benefits. Employees retired in public service with less than ten years of service are eligible for a refund of contributions with interest at current BOZ deposit rate.

11. Compensation for death on duty: If a Public Service Employee dies on duty, their estate is entitled to compensation equivalent to five times their annual basic pay.

12. Benefits following injury:  If the Public Service Employees are injured on duty, they are eligible for a disability benefit. The benefit amount is based on the degree of disability caused by the injury, as assessed by medical professionals.

For more information, call our contact centre on +260 630020101 or email us at customerservice@pspf.org.zm