THE Insurance and Pensions Commission (Ipec) has revealed that it might take legal action against pension funds that will fail to submit compensation schemes for the pre-2009 compensation framework on time.
Last month, government promulgated Statutory Instrument (SI) 162 of 2023 (Pension and Provident Funds Compensation Regulations) to ensure the pre-2009 compensation process is done through the submission of compensation schemes by pension funds and insurers.
The SI, published on October 1, gave players 90 days to submit compensation schemes for approval and Ipec was directed to consider and assess every compensation scheme within 30 days after receiving it.
Payments are then expected to be made within 30 days after approval.
Ipec actuarial director Robson Mtangadura said the Smith Commission of Inquiry into the Conversion of Insurance and Pensions Values from Zimbabwe dollars to US dollars was hampered by challenges in getting information from pension funds.
Mtangadura was speaking during the Zimbabwe Association of Pension Funds Principal Officers and Chairpersons Convention in Bulawayo last week
“We have seen the issue of record challenges during the Justice Smith investigation (to address pre-2009 loss of pension values),” he said.
“The 2009 compensation investigation is expecting you to (submit to) the compensation framework using member data.
- UK based Zimbabwean divorces wife of 33 years over conjugal rights
- New perspectives: Money laundering red flags in insurance sector
- 3 000 non-resident pensioners owed US$1.5 million, says Ipec
- Removing barriers to women’s financial inclusion
Keep Reading
“We are looking forward to pension funds that do have data for their members.
“Make sure you dig your archives and provide all the information required.
“How can you manage someone’s pension funds without data? What are you using?
“You just know that the pension and the accumulation is so much without historical information.”
Mtangadura said the country could not continue talking about compensation for 22 years with nothing tangible on the ground.
He said there would be no extension on the stipulated deadlines given that an SI was a law.
“If you submit substandard information something will happen. Approval within 30 days of submission,” Mtangadura said.
“We commit to approval within expected timelines, so this is an SI, and it has got a course of law to it.
“We urge you to take it seriously because if you do not we can escalate this to a level where you will take it seriously.
“We can’t go for 22 years talking about compensation.
“Some of the pensioners are dying without getting their compensation. We do not have time and we are not going to have an extension.”
Pension funds have until December to submit compensation plans that must be approved by January 2024 and payments will be made the following month.
“By June, we must close all the submissions no extension. The responsibilities of board of trustees is well articulated so we don’t expect to have any issues,” Mtangadura added.
Independent actuary David Mureriwa said it was important to ensure that the compensation process gives real benefits to pensioners.
“If not, then this will be just an exercise which will not bring finality to our problems,” Mureriwa said.
“We are bound to have a challenge where this conversation will be paid in perpetuity.
“We need to ensure that we need to have that.
“If you read the Justice Smith report, it gave the impression that the power of the laws appears to be macro in nature and they expected the government, the state, to compensate more than the industry, so to speak.”
Finance and Investment Promotion deputy minister David Mnangagwa said both government and pensioners would benefit from the compensation process.
“Both Government and private pensioners will benefit from the compensation process,” Mnangagwa said.
“On its part, Government has already made a commitment to contribute up to US$175 million towards the compensation process.”
