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Courtney Matende, Midlands Reporter
LOCAL authorities in Zimbabwe owe the Local Authorities Pension Fund (LAPF) about $200 million in unremitted pension contributions.
In an interview recently, Insurance and Pensions Commission (IPEC) Public Relations Manager, Mr Lloyd Gumbo, said local authorities have been deducting money from employees’ salaries without remitting to the Local Authorities Pension Fund.
“At the moment local authorities owe the LAPF about $200 million which they have not been remitting to the pension fund. What has been happening is that local authorities have been deducting pension contributions but not remitting them to the LAPF and this is happening right across the country,” said Mr Gumbo.
He said the regulator was concerned about the development as it impacts on the welfare of workers when they retire.
“These are issues that we are concerned about as a regulator because it means the people who are working in these local authorities will not be able to get the benefits they are supposed to get when they retire because the employer was not remitting their contributions,” Mr Gumbo said.
The LAPF was established in Zimbabwe in 1950 as a self-administered defined benefit scheme meant to benefit workers in the country’s local authorities.
Meanwhile, employers owe the various pension funds in the country at least $600 million in unremitted pension contributions.
“It’s something of concern to us as a regulator because employees are left exposed, they have false comfort in thinking that their retirement is secure yet it’s not. It’s critical that every worker checks with his or her employer if they are remitting pension contributions,” said Mr Gumbo.
He encouraged workers to engage boards of trustees for their respective pension funds to determine if their pension contributions are up-to-date. Mr Gumbo said the board of trustees can sue the employer for failing to remit employees’ pension contributions.
Online Reporter