Pre-2009 pension compensation dominates IPEC AGM

The issue of pre-2009 compensation for the loss of value of insurance and pension policies following their conversion from the Zimbabwe dollar to the United States dollar, took centre stage at the IPEC AGM last week.

Stakeholders called for a speedy conclusion to the long-standing matter, which they said is key to the restoration of confidence in insurance and pensions.

Finance, Economic Development and Investment Promotion Deputy Minister, Honourable David Kudakwashe Mnangagwa said there is need to bring the pre-2009 compensation to finality.

“This is a long overdue matter, which we should resolve and move the industry forward,” he said.

“Therefore, we call upon insurance companies and pension funds to do the needful in bringing this matter to a closure. We cannot spend more than seven (7) years after the conclusion of the Justice Smith Commission’s report to close the matter.”

IPEC Board Chairperson, Mr Albert Nduna said his Board was elated by the gazetting of the Pension and Provident Funds (2009 Compensation) Regulations in September last year.

“Having evaluated the industry’s capital structure, the Board believes that the industry has reasonable capacity to make good and compensate policyholders and pension fund members for loss of value as per the Commission of Inquiry’s recommendation,” said Mr Nduna.

IPEC Commissioner, Dr Grace Muradzikwa bemoaned the delays in approving compensation schemes due to inadequate data in the compensation schemes submitted by pension funds.

She said the compensation regulations required granular data, which some pension funds indicated that they did not have adding that some stakeholders are proposing that the Commission proceed to approve the submitted compensation schemes to move the process forward, even though they did not provide the granular data.

However, Chairperson of the Parliamentary Portfolio Committee on Finance, Economic Development and Investment Promotion, Honourable Clemence Chiduwa said his committee would not condone approval of compensation schemes that do not meet all the requirements of the compensation regulations.

“The position of the committee is very clear, especially on two issues – that we need granular data to be provided and we need a clear separation of assets,” said Hon Chiduwa.

Speaking at the same AGM, Zimbabwe Association of Pension Funds chairperson, Mr Williefaston Chibaya said the industry was committed to seeing the issue finalised.

“In terms of timelines, we are very clear that we need to go past this hurdle because as an industry, we will be able to rebuild confidence if we get past this one,” he said.

“It is quite clear to our membership that there is a need for us to clear the compensation within this year and within the timelines that we would have agreed on.”