By Dr. Brian Mushimba
I have followed this discussion with lots of interest. That government wants people to access their pension funds before they retire. That such will incentivize people to invest and earn returns before they retire. The thinking may be noble and a good gesture but govt must be cautioned on the implementation of this initiative.
People that contribute to NAPSA are mainly career professionals. They have very limited access to entrepreneurial manoeuvres. They are comfortable working for however many years and then retire to access their hard-earned money and live the rest of their lives.
My caution is that allowing people to access this money cuts into what they will get when they retire. It opens them up to bad investments and become targets of all manner of fraud. Investing in a way that brings a return is a trade someone has to fully understand, embrace and commit to. It’s not a by the way thing that people can do when they knock off work in their spare time or on weekends.
If the idea is to allow people access to money so they can buy farms, and build houses while they are still gainfully employed, govt can make those facilitations without touching people’s pensions. Govt can set up schemes or compel financial institutions to grant workers loans to build and acquire farms while keeping their pensions intact.
It will be a disaster to speculate with this money that is supposed to give a semblance of dignity to elderly people that worked their entire life.