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Blessings Chidakwa Municipal Reporter
OPPOSITION-led local authorities including Harare, Bulawayo, Gweru, Masvingo, Kwekwe, and Chitungwiza are dominating a list of 50 employers countrywide failing to remit pension contributions.
Corruption-riddled urban councils such as Harare City Council have an outstanding balance of about $545,4 million, Bulawayo City Council $202,4 million, Chitungwiza Municipality $141,5 million and Gweru City Council $77,7 million.
Other councils on the Insurance and Pensions Commission (IPEC) list are Kariba Municipality $42,7 million, Chinhoyi Municipality $36,5 million, Redcliff Municipality $32,8 million, Beitbridge Town Council $25,1 million and Victoria Falls Municipality $20,2 million.
The list also includes Plumtree Rural District Council $18,9 million, Masvingo Municipality $18,5 million, Rusape Town Council $18,4 million and Kwekwe Municipality $17,6 million.
In a notice titled, “Publication of defaulting sponsoring employers”, IPEC said the pensions contribution arrears stood at $5, 3 billion as at March 2022.
“IPEC has noted with concern failure by some employers to remit pension contributions to their respective pension funds, to the detriment of pension scheme members, who end up receiving reduced or no benefits when they become due.
“Employers that deduct pensions contributions are required in section 2 (a) of Statutory Instrument 61 of 201, to pay contributions into the pension fund within 14 days from the end of the calendar month to which they refer,” reads the notice.
IPEC said labour organisations are urged to engage employers who are not remitting pension contributions for the purposes of protecting members against old-age poverty.
It also called upon trustees of the affected pension funds to put measures in place to ensure the said employers remit outstanding contributions for the benefit of their pension scheme members.
Parliament recently passed a law that punishes errant employers who do not remit pension contributions of their employees.
The law comes with a fund to compensate insurance policyholders and pensioners if they suffer losses from the collapse of the firms.
The Pension and Provident Fund Amendment Bill sailed through Parliament with aspects that seek to restore confidence in the sector.
The august House is also considering the Insurance Amendment Bill and the Insurance and Pensions Commission Amendment Bill.
The Insurance Amendment Bill will restrict insurance companies to providing one class of insurance between short term and life term.
On the other hand, the IPEC Amendment Bill empowers the regulatory body to fix minimum and maximum premiums of a given class of insurance cover in addition to creating a fund to protect policyholders should an insurance firm get insolvent.
The Pension and Provident Fund Amendment Bill, which now awaits Presidential assent before it becomes law, provides both criminal and civil penalties for errant employers who fail or neglect to remit employees’ contributions.
Clause 17 of the Bill compels employers to remit pension contributions deducted from their employees within 14 days from the end of each month or face criminal charges and civil action.
Errant employers have in the past been accruing huge debts to pension funds by not remitting contributions, even though they deduct such from employees’ pay, and that has paralysed the financial operations of many funds.
The IPEC Amendment Bill establishes a Fund that will protect policyholders in the event that the insurance company goes under.
Clause 11 of the Bill stipulates that the fund will be administered by a Board of the Insurance and Commission, which is a body corporate capable of suing or can be sued.
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