The structure of pension systems in most countries in Africa consists of non-contributory and contributory pension systems. Non-contributory pensions systems are social pensions financed through government taxes to provide basic pension for old age. On the other hand, contributory pension schemes are either earnings-related or flat rate pension schemes financed through contributions from employees, employers, or both.
The design of pension systems in most countries in Africa seems to favor workers in the formal sector where benefits are offered either by public service pension schemes, mandatory national schemes, private occupational schemes managed by service providers, and voluntary individual pension plans. Notably, the design of the pension systems leans more towards formal sector workers than to the informal sector who are in turn, left to rely on informal arrangements.
Over the years, several countries in Africa have reformed their pensions systems to address the flaws and lacunas identified in the pension systems designs. These reforms have predominantly targeted public sector pension schemes with an aim to achieve fiscal sustainability and reduce on the growing fiscal burden.
Despite the reforms, pension systems in Africa continue to face a myriad of challenges around adequacy of benefits, certain opaque costs, sustainability, poor coverage and suboptimal fund governance. In effect, these challenges have resulted in the pension systems in Africa being characterized by low assets under management, investment in traditional investment assets (mainly government securities and equities), low returns on investment, and restrictive regulatory frameworks.
Against this backdrop, the Africa Pension Supervisors Association (APSA) with support from FSD Africa, and in collaboration with the Pension and Insurance Authority (PIA) of Zambia co-hosted the 5th APSA Annual Conference, to discuss identified challenges and propose policy solutions. The conference was held from 25th – 26th July 2024 at Radisson Blu Mosi-Oa-Tunya Hotel, Livingstone Zambia, under the theme “Chronicling Africa’s Pension Journey Towards a Dignified Retirement”.
