The Insurance and Pensions Commission (IPEC) joins the rest of the World in commemorating the International Pensions Awareness Day, which is observed on 15 September, annually.

The day was set aside to remind people about the importance of saving for retirement.

The last two national census surveys conducted by the Zimbabwe Statistical Agency (Zimstat) indicates that Zimbabwe’s life expectancy continues to increase from 44.2 years in 2002 to 60.7 years in 2012. This implies that, there are higher chances that retirements are likely to last longer, hence the need to plan for life after retirement.

As the pensions regulator, IPEC acknowledges that confidence in the pension sector is arguably at its lowest owing to the loss of insurance and pension values due to hyperinflation and the unintended consequences of the 2009 and 2019 monetary reforms.

The Commission is implementing measures to mitigate the effects of these losses, in line with its statutory mandate of protecting the interests of policyholders and pension scheme members.

Pursuant to the findings and recommendations of the Justice Smith-Led Commission of Inquiry into the Conversion of Insurance and Pension Values, IPEC is working with key stakeholders on compensation modalities for the 2009 losses, with actual pay outs expected early next year.

In its assessment on the adequacy of the regulatory and supervisory regime, the Justice Smith-led Commission of Inquiry into the Conversion of Insurance and Pension Values noted that IPEC did not have adequate skills and supporting legislation to provide guidance to the insurance and pensions industry on how to convert insurance and pension values, following the adoption of the multicurrency system in 2009.

Admittedly, IPEC was only three years old at the time, after its weaning off the Ministry of Finance and Economic Development in 2006. Regrettably, it did not have some of the requisite skills for regulating the insurance and pensions industry, such as actuarial, accounting, legal, investment management and economics, among others. 

As part of post-inquiry reforms, the Commission is now adequately resourced in terms of head count, skills mix, and its enabling legislation, which is currently before Parliament, is being strengthened. Drawing lessons from the 2009 currency conversion, the Commission issued a Guideline on Adjustment of Insurance and Pension Values in Response to the 2019 Currency Reforms in March 2020.

As a result, policyholders and pension scheme members had their benefits reviewed upwards significantly with pension funds declaring annualised bonuses and pension increases.

The Commission continues to enforce compliance with the requirements of the Guideline by all insurance companies and pension funds for the benefit of pension scheme members in line with asset revaluations.

To entrench fair treatment of insurance and pension scheme members, IPEC issued a Treating Customers Fairly Framework to the insurance and pensions industry in February this year to ensure fair outcomes for policyholders and pension scheme members. IPEC expects insurance companies and pension funds to treat their customers fairly, with truant ones facing regulatory sanctions.

IPEC has strengthened its oversight on pension funds from both a prudential and market conduct perspective. Recent developments include:-

• the move to regulate expenses of pension funds to protect pension scheme members;
• review of investment guidelines and legacy products in the market to make them relevant in the obtaining macroeconomic environment; and
• re-registration of pension fund rules to strengthen provisions on member protection, governance and accountability.

The Commission is also enforcing the legal requirement for asset separation, which is aimed at ensuring that assets belonging to policyholders and pension scheme members are ring-fenced for supporting liabilities of policyholders and pension scheme members.

Noting the Covid-19 related pressure on partial access to pension savings, IPEC widened the criteria for commutation to include school fees, medical bills and first-time housing development. The Commission also granted moratorium of 90 days before suspension of pensioners as a Covid-19 Response Measure. 

On another note, IPEC is concerned with the high levels of unremitted pension contributions, which stood at ZW$3.05 billion as at 30 June 2021. Failure to remit contributions results in members receiving none or reduced as the pension fund would not have received the contributions. The Commission will be publishing the list of pension funds in contribution arrears. Meanwhile, pension scheme members are urged to use the Pensions Awareness Day to check whether their employers are remitting pension contributions to their pension funds. The Commission also urges pension fund trustees to ensure that sponsoring employers remit pension contributions.

Another area of concern to the Commission, is unclaimed pension benefits to the tune of ZW$1.09 billion as at 30 June 2021. The Commission again encourages pensioners who have not claimed their pension benefits to use the Pensions Awareness Day to contact their pension funds directly or search for their names on the IPEC Unclaimed Benefits Search Engine on www.ipec.co.zw. Alternatively, they can SMS the word pensions to 0787821846 and follow the instructions.

The Commission is running a Pensions Awareness Month campaign on its official social media platforms-Twitter and Facebook under the name: IPECZW. The campaign sensitises the public about pensions.

IPEC: Protecting the Interests of Insurance and Pension Consumers