SOLUSI h 5Hypothesis PAGEREF _Toc517985152 h 6Purpose

SOLUSI UNIVERSITY NON COMPLIANCE ON SOCIAL SECURITY SCHEMES (NSSA). CASE OF MUTARE REGIONA RESEARCH SUBMITTED TO SOLUSI UNIVERSITY IN PARTIAL FULFILMENT OF THE BBA ACCOUNTING DEGREEBYIREEN MUSAVENGANATable of Contents TOC o “1-3” h z u CHAPTER 1 PAGEREF _Toc517985147 h 3Introduction PAGEREF _Toc517985148 h 3Background of the study PAGEREF _Toc517985149 h 3Statement of the problem PAGEREF _Toc517985150 h 5Research questions PAGEREF _Toc517985151 h 5Hypothesis PAGEREF _Toc517985152 h 6Purpose of the study PAGEREF _Toc517985153 h 6Significance of the study PAGEREF _Toc517985154 h 6Conceptual framework PAGEREF _Toc517985155 h 6Assumptions PAGEREF _Toc517985156 h 7Limitations of the study PAGEREF _Toc517985157 h 8Delimitations of the study PAGEREF _Toc517985158 h 8Acronyms PAGEREF _Toc517985159 h 8Definitions of terms PAGEREF _Toc517985160 h 9Organization of the study PAGEREF _Toc517985161 h 10CHAPTER 1IntroductionThis research`s main aim is to focus on factors influencing non compliance on National Social Security Schemes. In this chapter the statement of the problem is discussed and also the chapter entails the purpose of the study, the significance of the study, conceptual framework, assumptions, limitations of the study, de-limitations of the study and so on.Background of the studyThe National Social Security Authority (NSSA) is a parastatal which is responsible for administering a statutory responsibility fund in Zimbabwe in the form of Social Security Schemes. All employers and employees in formal employment are required to make monthly contributions towards the national pension scheme and workers compensation insurance fund scheme and this is in accordance with the national social security act chapter 17.

04 of 1989, statutory instrument 393 of 1993 and statutory instrument 68 of 1990. The authority came into existence to establish Social security schemes for the provision of benefits to contributors of the schemes for the whole nation. NSSA administers Workers Compensation Insurance Fund which started its operations in 1989. The National Pension and Other benefits scheme which started its operations on 1994 that is on 1 October 1994. The NSSA governance framework is based on the existence of a proper legal and regulatory framework which govern its operations. NSSA`s mission is to provide social security and promote occupational safety and health for all members through responsive schemes and services.Though NSSA has other business operations, the main source of income for NSSA comes from the contributions of the employers and employees.

Sometimes it is hard to do all the work on your own
Let us help you get a good grade on your paper. Get expert help in mere 10 minutes with:
  • Thesis Statement
  • Structure and Outline
  • Voice and Grammar
  • Conclusion
Get essay help
No paying upfront

Contributions received are invested to ensure continuity of the schemes. The Pension and Other Benefit Scheme (POBS) contributions are calculated at 7% half of the percentage coming from the employer and the ceiling is $700.00 in monthly salaries. The current payslip at the time of retirement is considered.

The employer is then solely responsible for the funding of the workers compensation insurance fund which we call WCIF in abbreviations. These contributions are analyzed monthly based on a budget projected for each region in Zimbabwe by the compliance department, and then summarized cumulatively for the whole Organisation at Head Office in HarareNormal retirement is at the age of 60 and late retirement at the age of 65 that is if the contributors feel that they are still eligible to perform some tasks. One can retire at the age of 55 if the person is on arduous employment for example those who work in farms. The contributors are entitled to a monthly pension if they contributed for 10 years and above towards the scheme, grant if they contributed for less than 10 years. Benefits such as children’s allowance, survivors pension, invalidity pension, and injury at work allowances are also provided for by the national social security authority. NSSA has six main Regional Offices and eleven sub-offices. The main regions are Harare, Bulawayo, Gweru, Masvingo, Mutare and Chinhoyi.

Compliance rateThis is the rate at which registered employees make monthly contributions towards the scheme. Compliance rate is then measured by comparing the number of registered employers against the number of employers who are paying their contributions on a monthly basis. Legal compliance rate is then analysed as the employer’s capacity and keenness to conform to contributions laws which are determined by ethics, legal environment and other situational factors at a particular time and place. It is possible to determine compliance rate at any given time either per month or per year thus according to NSSA Employers guide of 2010.Statement of the problemDespite the fact that it was the government of Zimbabwe that made it regulatory for all employers and employees that they make contributions to the scheme even those who are under some private pension scheme, the rate of compliance towards the scheme is now relatively low. The NSSA Act says that any person who does not comply with any provision of a scheme with which it is his duty to comply, shall be guilty of an offence and liable to a fine not exceeding level five or imprisonment for a period not exceeding six months or both thus NSSA Act Chapter17.

04, section 3a and Contributions and Compliance Division annual report 2014. Therefore non compliance is violation of designated low. Compliance and contribution collection constitute core functions within social security systems. Wide population coverage cannot be achieved without appropriate and functioning contribution collection systems, which includes compliance and enforcement. However since 2015 the contributions and annual division report continuously reported that the rate of compliance was relatively low and therefore it is because of this report that made the write want to delve deeper in researching for the factors which are influencing non compliance.Research questionsWhat is the rate of non compliance on Social Security Schemes.What led to increase on non compliance and what are some of the reasons for non compliance.

To what extent has non compliance on contributions made towards the scheme affected the National Social Security Authority.Are there any solutions and strategies that can be put in place to improve compliance on Social Security Schemes.HypothesisH?= There is no significant relationship between difficulties in payment processes, workers personal reasons and Purpose of the studyThe purpose of this study is to look for factors influencing non compliance rate with social security schemes so as to suggest ways that NSSA can adopt in order to improve compliance.Significance of the studyThe research is a requirement of Solusi University needed by the student in completion of the BBA Accounting Degree. The research will also help the student in acquiring analytical skills which are important in decision making and also in solving problems both at school, workplace and in social life.

Solusi University can also make the information available to other students who would want to do more researches and improve in their careers. NSSA will also benefit from the research as they will come to understand some of the causes of non compliance and come up with strategic plans which will reduce non compliance and result in the firm gaining more income through contributions that will be made towards the scheme. There are some employees who visit NSSA when they retire only to find out that the employer was not contributing towards NSSA and had not registered its employees and therefore these will be minimized.Conceptual frameworkNon compliance on Social Security Security Schemes.

Case of NSSALiquidity challenges in the economyHigh contribution rates Low penalties charged on avoidanceLow benefits paid to pensionersHigh probability of not being detectedDifficulties in payment processesMyopic behavior: ethics and attitudeWorkers` personal reasonsAssumptionsIn carrying out the research the writer will assume that the whole population will be fully represented and they will have the knowledge of how NSSA procedures are carried out. The population will be represented through samples that the researcher will carry out. The researcher also assumes that she will have enough funds to enable her carry out her research. As management is constantly changing in organizations, the writer assumes that NSSA management will not change during the period of the study and that management will adopt the recommendations from the study as part of their strategy. The writer also assumes that the economic environment in which the business is operating from will not remain unchanged. Lastly is the assumption that NSSA will go into the foreseeable future thus going concern.Limitations of the studyNSSA may not be willing to disclose information that the organization thinks that it`s private where as it might that information that will be needed for academic purposes by the researcher.

Organizations are governed by policies and NSSA as an organization also have policies that may result in crucial data being restricted. However the writer will give assurance to the organization that the information is only for academic purposes and will not be disclosed to anyone.Delimitations of the studyThe research is anticipated to look at the level and causes of non compliance thus with regards to NSSA scheme contributions and the results on performance and also try to come up with some recommendations that can be put in place to improve on compliance. The writer will only take samples of employers from Mutare and these will present all employers in the country. The research subjects will be employees from the compliance department thus mainly senior compliance inspectors and some selected employers from Mutare Region.AcronymsNSSA National Social Security Authority.POBS Pensions and Other Benefits SchemeWCIFWorkers Compensation Insurance FundSSRN Social Security Registration Number. This is issued to employers on registrationSSN Social Security NumberIC Industrial Code which determine the rate of WCIF contributionsDefinitions of termsCompliance: The extent to which registered employers meet their contribution obligations within the stipulated time.

It can also be viewed as the employers’ ability and willingness to comply with contribution laws which are determined by ethics, legal environment and other situational factors at a particular time and place. Compliance rate: the total number of employers who comply expressed as a percentage of the total number of employers that are registered to NSSA over a period of time. Contribution collection rate: contributions actually received as a percentage of budgeted revenue. Compliance Blitz: an exercise where by all NSSA compliance inspectors from different regional offices target one area to enforce compliance by employers in that area. Contribution evasion: a situation where employers do not pay required social security contributions.

Insurable Earnings: the employee earnings that are subjected to a NSSA deduction and currently it is total basic Salary for The Workers Compensation and Insurance Fund and total Basic salary up to a maximum of $700 for the National Pension Scheme. Contribution rate: The rate which is used to calculate contributions on insurable earnings and currently 3.5% and employer put equivalent to make a total of employer and employee contributions of 7% Workers compensation insurance fund rate: is the rate in percentage terms that is charged on employee basic salaries to determine the premium that is attributed to the Workers compensation and insurance fund. Legal Compliance: This refers to employers which remit contributions in line with NSSA Act and StatutesSurcharges: These ate penalties levied on all late NSSA contributions and premiums ranges from 10% to maximum of 50%Pensioners: All retired workers, spouses of deceased, injured and invalid workers who receive NSSA benefits.

Survivor’s Pension: Pension and benefits paid to spouses or relative of a deceased worker or pensioner.Stakeholders: All groups of people, institutions and organizations with a claim, direct or indirect interest to NSSA.The Authority: This refers to NSSA, the National Social Security AuthorityOrganization of the studyChapter one is basically introduction of the research thus introducing background of the study, statement of the problem and also the purpose of the study. Chapter two is literature review thus reviewing literature thus in this chapter the writer will be looking at the factors influencing non compliance in detail. Chapter three is research methodology thus the type of method that the writer has used to test hypothesis of her research.

Data presentation, interpretation, analysis and findings will be on chapter four. Lastly chapter five will be the summary, conclusions and recommendations given to the organization by the writer.


I'm Gerard!

Would you like to get a custom essay? How about receiving a customized one?

Check it out