The ManicaPost
Daniel Mhonda Business Correspondent
THERE is need to put in place mechanisms to guard against loss of value to pension contributors in the event of an economic shock, the chairperson of the Portfolio Committee on Budget, Finance and Economic Development Honourable Felix Mhona has said.
Addressing a seminar on findings of the commission of inquiry into the conversion of insurance and pension values from the Zimbabwean dollar to United States dollar in Mutare recently, he said recent developments in the economy where year-on-year inflation for January 2019 had spiked to 56.9 percent from 42.09 percent in December 2018, was a wakeup call for the nation to ensure that there won’t be a second episode of this sad fairy tale.
“Once beaten twice shy. We also need to be alive to the disclosure by Zimbabwe Pensions and Insurance Rights Trust (ZimPIRT) that the industry is owed more than $600 million in pension arrears against a retirement fund value of $5 billion,” he said.
Meanwhile, presenting a paper at the same seminar, secretary of the commission of inquiry Mr Cuthbert Munjoma said during the public hearings a lot of anger was directed to the insurance and pension industry in general, which demonstrated clear evidence of loss of confidence in the sector.
“Amounts of as low as US$0.08 cents were paid in lieu of education policies, endowment policies or retirement annuities pensioners getting amounts that cannot sustain them in their twilight years, and once-off pension benefits averaging US$20 to US$40. The benefits were not in line with their reasonable benefit expectations,” he said.
Mr Munjoma added that other complains emanated from National Social Security Authority (NASSA) time limit to clear pensions’ benefits and NSSA pensioners’ failure to access their benefits due to a prescription in its regulations which demanded that benefits should be claimed within five years.
NASSA, he said, paid a flat pension contribution refund of $25 to contributors who contributed for less than the minimum 10-year period yet there was no clarity as to how the $25 limit was determined and why the amount was the same for people who contributed for a different number of years.
He said there was no clarity as to why NSSA collected for those who would reach retirement before contributing for a minimum of ten years.
Some complains, said Mr Munjoma, were from the elders on pension arrangements for Church-related hospitals and mission schools where employees of the country’s 135 mission or church-related hospitals, schools and colleges had no pension arrangements prior to 1993.
“Some retirees of church-related hospitals and mission schools, who were not covered by Government as grant-aided workers had no pension arrangements. One touching story was of a Masvingo retiree who worked as a nurse at a church-related mission hospital from 1965 to 2014 but was not receiving a pension,” he said.
Mr Munjoma said there was loss arising from de-mutualisation of Old Mutual and First Mutual which took place in 1999 and 2003, respectively. Some who complained alleged that there was poor record-keeping as most failed to account for individual pension fund members’ contribution records and investment returns.
