ONLY 50% of Zimbabwe’s pension funds are currently active as many others face collapse, a development that may spell doom on workers reaching retirement age, official statistics from the country’s insurance and pensions regulator have shown.
BERNARD MPOFU
Pensions are one of the most emotive issues in Zimbabwe following yesteryear events where a lot of people lost their lifetime savings between 2004 and 2009 without any recourse.
As a result, many Zimbabweans no longer trust pension funds at all and the matter has been compounded by the floundering economy.
Some companies, on the other hand, have been defaulting on their pension contributions, citing an unfavourable economic environment.
Mistrust has been at the centre of relations between insurance companies and pension contributors, prompting the authorities to come up with several confidence boosting measures.
According to the Insurance and Pensionz Commission (Ipec), Pensions Industry Report for the half-year ended 30 June 2023, the number of registered occupational pension funds dropped to 970 during the period under review compared to 977 reported during prior comparative period
.Ipec says a total 394 funds were undergoing dissolution whilst eight dissolutions were completed during the quarter ended 30 June 2023.
“The decrease of 19 funds was as a result of transfers, mergers, dissolutions and the exclusion of funds, which had previously been double counted as a result of dual reporting. On the other hand, 12 new funds were registered,” Ipec says.
“Of the 970 funds, 492 were active, accounting for 51% of the industry’s funds. The remaining 478 funds were inactive as they were either paid up or undergoing dissolution. In addition, 37 pension funds were defined benefit schemes whilst the remainder were defined contribution schemes.”
The report also shows that only 14 of the 970 registered funds conduct their own in-house fund administration business. The remainder, which are insured and self-administered funds, outsource the services to fund administrators.
There were 13 fund administrators registered with Ipec as at 30 June 2023. Five of the 13 administrators were independent administrators, while the remaining eight were registered life assurance companies conducting fund administration business.
