Business Reporter
The Insurance and Pensions Commission (IPEC) has begun disbursing US$1,75 million to 8 600 private occupational pensioners as part of ongoing efforts to cushion retirees against value erosion caused by the 2019 currency reforms.
Under the exercise, beneficiaries are receiving US$200 each directly into their EcoCash mobile money wallets.
Mutapa Gold Resources is funding the payout following the US$ 1,75 million dividend it declared to IPEC, derived from government-backed equity holdings allocated to pensioners.
According to the regulator, beneficiaries were selected through a strict means-tested approach that prioritised elderly retirees and those who recorded the lowest benefit values following the 2019 currency conversion.
The compensation scheme traces back to February 2019, when the Government promulgated Statutory Instrument 33 of 2019, unpegging the local RTGS dollar/bond note from the US dollar and establishing an interbank foreign exchange market.
The policy converted all domestic US dollar-denominated assets, bank deposits and contractual pension funds to RTGS dollars at a 1:1 parity rate.
Subsequent rapid exchange rate depreciation and high inflation drastically eroded the purchasing power of accumulated pension funds and contractual savings overnight.
To mitigate the unintended losses, the Government in 2020 allocated IPEC a 5 percent non-dilutable equity stake in state-backed Kuvimba Mining House on behalf of affected private sector pensioners.
The arrangement was structured so that recurring dividend yields from state mining operations would directly fund gradual cash payouts to retirees over time.
Commenting on the development, Finance Minister Professor Mthuli Ncube noted that the distribution validates the Government’s decision to allocate equity to pensioners in state mining assets.
“The allocation of shareholding in Kuvimba Mining House to IPEC on behalf of pensioners in 2020, now Mutapa (Investment Fund), was intended to provide a source of funding for compensation through dividend payments, and this will be done on an ongoing basis,” Prof Ncube said.
“While these payments cannot fully restore the value lost, they represent the Government’s commitment and effort to mitigate the unintended consequences of the currency reforms on long-term contractual savings.”
IPEC commissioner Dr Grace Muradzikwa confirmed that funds have already started hitting the beneficiaries’ mobile accounts.
“Eligible pensioners have already started receiving their compensation payments of US$200 through their EcoCash wallets. Beneficiaries who receive the funds can cash out at any EcoCash kiosk,” Dr Muradzikwa said.
She added that the current batch covers the next tier of eligible pensioners following previous payouts in 2021 and 2022, which were funded by an initial dividend declaration of US$400 000.
IPEC clarified that the payouts relate exclusively to losses suffered during the 2019 currency reforms.
The 2019 currency conversion represented the second major episode in which pensioners saw their accumulated value wiped out.
The first occurred during the pre-2009 hyperinflationary era, which ultimately compelled Zimbabwe to ditch the original Zimbabwean dollar for a multi-currency basket dominated by the US dollar, ushering in full-scale dollarisation.
Dr Muradzikwa said official compensation for pre-2009 losses remains governed by a separate process, which will proceed once the necessary statutory regulations are officially gazetted.
