Examination of the effects of the National Pension Scheme Authority Partial Withdrawal on the Socio-economic Status of Contributors in Lusaka District, Zambia

Abstract

This study examined the socioeconomic effects of the National Pension Scheme Authority (NAPSA) partial withdrawal policy on contributors in Lusaka District, Zambia. Introduced through the National Pension Scheme Amendment Act No. 21 of 2023, the policy permits eligible contributors to access up to 20% of their accumulated pension savings before retirement. Using a mixed-methods approach, quantitative data was collected from 328 contributors through structured questionnaires, while qualitative data was obtained from 40 key informants comprising beneficiaries, non-beneficiaries, NAPSA officials, and financial experts. Quantitative data was analyzed using descriptive statistics, Pearson correlation analysis, and chi-square tests, while qualitative data was analyzed using thematic analysis. Findings revealed that the primary motivations for accessing partial withdrawals were meeting household expenses, debt repayment, housing development, and business investment. Beneficiaries reported moderate improvements in quality of life, financial independence, and ability to support family members. Significant positive relationships were observed between withdrawal effectiveness and quality of life (r = 0.377), financial independence (r = 0.668), social confidence (r = 0.385), and community participation (r = 0.305). However, many respondents reported that financial improvements were temporary when funds were used primarily for consumption rather than productive investments. The study concludes that while the policy has generated short-term socioeconomic benefits, its long-term impact depends largely on financial literacy and fund utilization patterns. The study recommends strengthening financial literacy programmes and enhancing investment guidance for contributors prior to accessing withdrawals.