THE pensions industry is struggling to meet the 31 March auditing deadline set by the Insurance and Pensions Commission (Ipec), a challenge which has been exacerbated by the government’s Covid-19 lockdown which runs into mid-February 2021.
Insurance companies, listed on the Zimbabwe Stock Exchange (ZSE), also have a 31 March deadline to report to the bourse.
Zimbabwe’s pension funds and insurance companies are now required to make public their financial results, among other new disclosure procedures, to create more openness around their operations.
The entities hold billions of dollars in pensioners’ and insurance clients’ monies and authorities say openness around how they run their finances is critical to ensuring the protection of these funds.
However, players in the pension industry told The NewsHawks that the 31 March deadline was unrealistic, considering the number of funds in their custody.
Industry personnel who spoke to The Newshawks said it is normal for a company that administers pension funds and is listed, to prioritise meeting the March deadline for listed companies.
The clash in timeframe between the ZSE and Ipec is putting auditors and pension funds administrators under pressure, industry official said.
Pensions industry personnel are arguing that even if the company can hire more auditors, they all report to the same administrator, making it hectic.
“We are finding this deadline very difficult to work with. I’m not so sure what the regulator seeks to achieve, but considering that most companies are already struggling in terms of resources, it is very difficult,” an industry stakeholder said.
“I will give you an example, if you look at a accompany like Old Mutual, say it was still actively participating on the ZSE, it means that the auditor will have pressure to auditing Old Mutual first for it to be able to meet its ZSE obligations for the first quarter, then it has pension funds under its management which are more than 30. How then does Old Mutual accommodate auditors for those pension funds under its roof? I find it very difficult.”
The situation has now been further complicated by the extended Covid-19 lockdown.
“The deadline is tricky to achieve given the lockdown in place. The audit fieldwork is done fairly manually and the lockdown has wiped out a month which auditors were supposed to access to sample files, etc, as they conduct their fieldwork.
“Administrators and trustees had geared themselves up for this new deadline but the lockdown is a real joker. Personally, it was achievable but under a strict work code/attitude but, with the Covid-19 lockdown, I don’t think so anymore. If the lockdown is lifted, auditors will need to access administrators’ records from, say, mid-February and that will probably end first week of March,” another industry insider said.
“Thereafter they take a week or two to come up with audited draft accounts which are then presented to trustees and then finally signed off.
“The earliest all this can be achieved now and again, in my view, is probably mid-April. So, deferring by a month, assuming there is no continued extensions, would be ideal.”