THE Insurance and Pensions Commission (Ipec) says it is seized with putting in place measures to improve benefits for pensioners after 53% of the complaints it handled in the fourth quarter of 2021 were related to low pension values.
These were occasioned by the currency conversion of 2009 with most pensioners following up on the Commission of Inquiry recommendations.
The measures include regulation of administration and investment management expenses, enhancing governance of pension funds and allowing offshore investments to diversify sovereign risk, among others.
In its 2021 fourth-quarter report, Ipec noted that the pensions industry continued to battle during non-payment of benefits, low values caused by hyperinflation and dollarisation in February 2009 and late payment of benefits.
Non-payment of benefits accounted for 24% of the complaints received in the quarter, whilst late payment of benefits, accounted for 15% in the last quarter of 2021 while unremitted contributions constituted 8% of the complaints received in the period under review.
“During the quarter ended 31 December 2021, the Commission received a total of 123 complaints relating to pensions, out of which 43 were resolved, 15 were under investigation and 65 related to the pre-2009 compensation, which requires implementation of the Commission of Inquiry’s recommended compensation framework. Those under investigation related to unremitted contributions, additional information required from pensioners and investigations by pension funds on payments made through cheques submitted to members’ former employers,” Ipec said.
The regulator added that the issue of compensation as recommended by the Justice Smith-led commission of inquiry remains outstanding as members seek a final solution to the long-standing programme.
“The commission is seized with putting in place a framework for pre-2009 compensation in line with recommendations of the commission of inquiry to bring closure on the compensation of the members who lost their pension values,” Ipec said.
During the period, the industry’s asset base grew in nominal terms by 189% to ZW$318.96 billion from ZW$110.24 billion recorded in December 2020 as the values for major asset classes adjusted in response to inflation.
The asset base of ZW$318.96 billion translates to an average asset share per member (including beneficiaries) of ZW$337 824.58 compared to ZW$121 852 as at 31 December 2020.
Given the annual rate of inflation of 24.9% for December 2021, the 177% increase in average asset per member indicates that the asset values are generally tracking inflation.
“However, it is important to note that pension values are still very low, and the commission is working together with the industry to improve members’ benefits through various initiatives. The increase in the asset base was mainly driven by quoted equities and investment properties, which had a combined share of 81.15% of the industry’s total assets. Quoted equities now constitute a bigger portion of the investment portfolio for the pensions industry,” Ipec said.