adminTHOUSANDS of pensioners around the country are wallowing in poverty amid reports that pension funds were owed more than $200 million by organisations not remitting pension deductions to them, with some local authorities pensioners having gone for up to 10 months without receiving their payouts.
According to statistics released by the Insurance and Pensions Commission (IPEC) last week, local pension funds were owed $211 million by companies and local authorities as at 31 March this year.
The Local Authorities Pension Fund (LAPF) is one of the worst affected pension funds, being owed more than $100 million by local authorities who are failing to remit contributions.
LAPF, which has about 30 000 pensioners, has been failing to make pension payments for the past 10 months, leading to most council pensioners across the country wallowing in poverty.
Pensioners who spoke to Sunday News said the situation had reduced them to paupers, with some claiming to have gone for close to three years without receiving their pensions.
“It’s sad that I have been reduced to a life of poverty yet I was making contributions religiously when I was still working. I have not been receiving anything for close to three years now and my efforts to seek an explanation have not yielded any fruits,” said one of the pensioners who preferred anonymity.
“Now I’m having to rely mainly on what my children send me from the city as if I had not planned for my future. It’s disheartening to say the least,” the pensioner added.
He said it was not clear how pension funds had also used the money they contributed.
Other pensioners also decried the meagre amounts they were receiving from their pension funds, saying the money was not enough to take one through the month.
IPEC commissioner Mrs Manette Mpofu confirmed that a number of local companies had not been remitting employees’ contributions, with some having been unable to do so since 2009 when the country adopted the multi-currency system.
She said the problem of non-remittance of pension contributions was affecting both insured schemes and self-administered funds.
“We can confirm that a sizable number of employers have failed to remit contributions to their respective funds. Some have been unable to do so since dollarisation in 2009.
“From our observations, the problem of failure to remit premiums cuts across all industries.
“Current statistics show that pension funds are owed $211 155 171 in arrears as at 31 March 2014. The global figure is inclusive of all arrears from both insured schemes and self-administered funds,” she said.
Mrs Mpofu said the non-remittance of workers’ contributions by employers was adversely affecting pension funds, acknowledging that pensioners were most affected as the pension funds would be left without money to pay them.
Most pension funds in the country rely heavily on workers’ contributions, with close to 80 percent of their revenue coming from the monthly premiums.
The IPEC commissioner said economic conditions prevailing in the country had seen some companies failing to remit pension contributions and pension funds struggling to realise meaningful returns from their various investments.
She added that IPEC was making efforts to encourage employers to religiously remit workers pension contributions to pension funds.
“This (non-remittance of workers’ contributions) has affected pension funds quite adversely as they will fail to pay fair benefits to members. Some members have retired to a life of poverty as benefits are either very low or take long to be received by pensioners.
“As IPEC we strenuously strive to get the employers to remit contributions to funds. In the majority of cases, employers cite the tough economic conditions including illiquidity for their failure to remit contributions.
“In addition, the investment climate is such that returns are quite low as most buildings owned and rented out by pension funds receive low rentals as tenants either do not pay or they make erratic payments.”
The problem of non-remittance of workers contribution is not only affecting pension funds, as workers unions have also alleged that they were owed millions of dollars in unpaid workers’ contributions by local companies.
National Union of Mines, Quarrying, Iron and Steel Workers of Zimbabwe, recently revealed that it was owed close to $100 000 by mining companies who were also not remitting workers’ subscriptions.
Online Reporter