If you have ever driven long distance, you may know that sinking feeling when you notice the fuel gauge is flashing and you are several hundred kilometres from the next filling station. Worse still if your trip takes you through a game park! Likewise, a good retirement means enough resources to see you comfortably through the years, you don’t want to find yourself in a panic. With more and more people on short term contracts with gratuity, it is important that the money should be invested to work for you and grow so that you can avoid the biggest problem with gratuity and your retirement will be comfortable.

More than 90% of Zambians at retirement become dependents again. Tradition dictates (and rightly so) that children have an obligation to care for parents that worked hard to give them a better life. But wouldn’t you prefer firstly the freedom of your only financial resource, and secondly to be able to spoil your grandchildren at that point? That is the dream! However, it is one thing to have the dream, it is another to have a plan to achieve that dream.

For many people, that plan takes the form of “gratuity goals”. You may be working on a contract, whether it is two years, three years or five years. You are expecting a lump sum benefit at the end of the period, and you need to figure out what to do with it. While you are a member of the compulsory NAPSA scheme, which aims to reduce the number of indigent citizens, you know that it will not suffice to maintain the lifestyle you enjoy. So you need avoid the biggest problem with gratuity and have a gratuity plan. This is where many people take a wrong turn, and we need to learn from their experience. After all, if I can learn from someone else’s mistakes, I don’t have to repeat them!

The safest investment for retirement is by putting your money into a private pension scheme. A lot of people feel they can invest their gratuity on their own, but here are five pitfalls to doing this, and how a proper scheme will achieve more with your money:

1. Picking The Perfect Plan

Your game plan is key. It is not wise to start asking around for business ideas when the funds are seated in your account, probably slowly depleted in the name of enjoying what you worked hard for. Many spend the money before they have made their final decision! Our human needs are many and never ending, and holding on to the cash while trying to formulate a plan is not wise. Those are the times when we lament, “Where did the money go?” It is better to leave the funds in the hands of professional investors

2. Picking a proven plan

You might have a plan from the word go. But you may also not have much experience in the field. Businesses often need a learning curve, and it is a real possibility that your resources may be depleted before you have mastered the investment of choice. For example, it takes time to learn how to manage farm workers who steal, army worm outbreaks, faulty irrigation systems and fluctuating market prices. Rather than gamble with your gratuity, invest it is a secure pension scheme, and use other financial resource or funding mechanisms for your dream business. Do not put your retirement at risk. Your pension scheme can be handled by experts who have passed through the learning curve of how to handle investment funds.

3. Escaping social pressure on your spending

Needless to say, any time to come into some money, and others find out, there will be tremendous social pressure to include them in your budget. New “best friends” appear from nowhere! Family pressure can be intense, and if you are susceptible to trying to please everyone, you will be in trouble!  Why not avoid all that by putting the money in the hands of experts who ensure that the funds will be invested for your future?

4. Lack of time to oversee the investment

The other constraint to investment is time. A pension scheme will ultimately provide passive income. Even though you may have a number of brilliant ideas for your gratuity, you need to be frank about the time constraints, which often lead to procrastination. Let your money work for you while you dedicate your time to other endeavours, the experts will dedicate their time to seeing that your investment will work for you.

5. Lastly, you need to make use of the pension scheme experts.

These are highly trained professionals who are dedicated to building your financial future. At primary school, you may have had the chance to play soccer, and each team leader would take turns picking players from among their friends. If you were putting together a football team, you would certainly want the best players on your side! This should be your mind-set when it comes to financial services. Pick the experienced professionals with a proven track record. A team that will deliver on its promises. A winning team! Bencon provides a platform for long-term savings, retirement advisory services and fund growth through astute investments. Make the right financial decision today.


You may be in a position to make recommendations to employees, or you may be thinking about your personal investments. We all want to avoid falling into that 90% that become dependants or even indigent at retirement. Passive income and pension schemes are the time tested answer to this challenge. It is never too soon to take that step. When you receive your dues avoid the biggest problem with gratuity listed above. Consider your long term financial needs. Tomorrow belongs to those who prepare for it today.