Online Reporter
Sunday Mail Reporter
IN a move to protect policyholders, the Insurance and Pensions Commission (IPEC) has issued a statutory directive to CBZ Bank to garnish the City of Harare’s bank accounts to recover ZiG40 million in outstanding pension contributions belonging to council employees.
The latest development signals the beginning of a wider crackdown against some of the major defaulters.
Pensions are critical for social security, acting as a foundation for retirement income.
They are fundamental for reducing old-age poverty, ensuring financial stability and providing income security for ageing populations.
They work alongside public systems to form a robust, multi-layered and often integrated safety net.
Enforcement action taken against the local authority targets funds deducted from workers’ salaries but are never remitted to the Local Authorities Pension Fund (LAPF) — a violation that affects retired workers.
Documents seen by The Sunday Mail reveal that IPEC Commissioner Dr Grace Muradzikwa signed the garnish order on February 17, 2026, directing CBZ Bank to immediately attach funds from the City of Harare’s account number 1120038980020 and transfer them to LAPF’s account with CABS.
The directive cites Section 16(8) of the Pensions and Provident Funds Act (Chapter 24:32), which empowers the commissioner to order a bank to remit outstanding contributions when a participating employer fails to comply with earlier directions.
“The commission has established that the City of Harare, a sponsoring employer whose employees are pension fund members of the Local Authorities Pension Fund, has defaulted on its statutory obligation to remit pension contributions for a period exceeding three months, in violation of Section 16 of the Pensions and Provident Funds Act,” reads the directive.
The order constitutes a “first-priority charge” against the council’s bank account and remains in effect until the full ZiG40 million is recovered.
CBZ has been given five working days to provide written confirmation of compliance, including proof of payment and dates of remittance.
The regulator has warned CBZ against any attempt to circumvent the garnish order, stating that non-compliance constitutes an offence under Section 55(4) of the Act, carrying a penalty of a fine of up to Level Six or imprisonment not exceeding six months, or both.
Responding to questions from The Sunday Mail, Dr Muradzikwa emphasised the gravity of the offence and the legal imperative behind the commission’s action.
“In terms of the Pension and Provident Funds Act (Chapter 24:32), sponsoring employers are legally obligated not only to deduct but remit pension contributions to registered pension funds within prescribed time frames,” Dr Muradzikwa said.
“These contributions constitute deferred earnings for employees and are critical for safeguarding their retirement security.
“Failure to remit contributions not only contravenes the law but also prejudices pension scheme members whose benefits depend on timely and consistent funding. IPEC continues to urge all employers, including public entities, to prioritise compliance with pension remittance obligations in order to protect workers’ retirement savings and uphold confidence in the pensions system.”
Among the organisations flagged by the commission for non-remittance of pension funds are some of the country’s top companies, parastatals and local authorities.
