shloboe boe
Prosper Ndlovu, prosper.ndlovu@chronicle.co.zw
PENSION funds risk incurring stiffer regulatory penalties over delays in finalising the compensation of pensioners for the pre-2009 savings losses, Treasury has warned.
This comes amid concerns that the compensation process has dragged for long at a time when most beneficiaries need the resources.
The Insurance and Pensions Commission (Ipec) was forced to defer compensation payments to pensioners whose savings lost value around 2009, saying it received submissions that were not compliant with statutory provisions.
The payments were scheduled to start in March this year in line with Statutory Instrument 162 of 2023 (Compensation for Loss of Pre-2009 Value of Pension Benefits Regulations) on 29 September 2023.
Between 2007 and 2009 the country experienced a major hyper-inflationary period, which eroded the value of most savings including pensions.
Responding to stakeholder concerns, the Government in 2015 constituted a Commission of Inquiry to investigate the causes and extent of the loss of value of life insurance policies and pensions suffered following the conversion of the Zimbabwe dollar policies to foreign currency in 2009.
Retired judge, Justice George Smith, led the Commission of Inquiry, which found out that most policyholders and pensioners were prejudiced during the conversion process and recommended that they be compensated.
Following the gazetting of the compensation framework last year, Ipec called on the industry to submit compensation plans for approval with a deadline to finalise the process early this year. However, by March this year none of the 1 249 assessed compensation schemes were approved due to non-compliance with the provisions of Statutory Instrument 162 of 2023 (compensation regulations).
On its part Government has disbursed US$25 million of the US$30 million allocated in the 2024 national budget towards the compensation of public sector pensioners, while US$5 million has been set aside to augment compensation of private pensioners.
The process fulfils commitment under the Second Republic to complete the compensation of pensioners whose contributions lost value due to the 2009 currency reforms as prescribed by the Justice Smith Commission of Inquiry.
Finance, Economic Development and Investment Promotion Minister, Professor Mthuli Ncube, in his 2025 fiscal policy statement presented in Parliament last week, expressed concerns over delays in compensation payments.
He noted that of the assessed funds, only two self-administered funds namely Mimosa Mining Pension Fund and AMZIM Pension Fund were approved whilst the rest are yet to comply with the requirements of the compensation regulations.
The participating private sector schemes submissions were received and assessed by the industry regulator — Ipec.
“Government will continue to impose regulatory sanctions on all entities that continue to delay submission of their compensation schemes,” said Prof Ncube.
“Of the US$30 million, US$25 million was disbursed towards the compensation of Government pensioners, while US$5 million has been set aside to augment compensation of private pensioners.”
On pension industry reforms, he said the Government will, in 2025, implement a holistic approach to pension reforms aimed at both public and private occupational pension funds in a bid to address challenges of low coverage, inadequate benefits and asset security issues by pension industry.
“The holistic national pension reforms require commitment of all stakeholders, including business, labour, Government, financial sector regulators, private players, research institutions, academia and civil society,” said the minister.
“This is meant to revitalise, strengthen and unleash the potential of the pensions industry in mitigating old age poverty and long-term savings mobilisation for national development.”
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