Online Reporter
Nelson Gahadza
Senior Business Reporter
Zimbabwe’s pension benefits are gradually improving, with the average monthly pension increasing more than fourfold over the past two years, although payments remain inadequate for many retirees, the Insurance and Pensions Commission (IPEC) Commissioner, Dr Grace Muradzikwa, has said.
Speaking at the commission’s 8th Annual General Meeting, held in Harare on Wednesday, Dr Muradzikwa said regulatory interventions were beginning to yield positive results, as pensioners were now receiving significantly better benefits compared with previous years.
She said IPEC had introduced a Bread Index to track pension adequacy by measuring the purchasing power of pension benefits based on the number of loaves of bread an average pensioner can buy each month.
According to the index, average pensions have risen from the equivalent of 20 loaves of bread, or about US$34, in 2024 to approximately 85 loaves of bread currently.
“We are not satisfied with where we are, but we are encouraged by the trend. That upward trajectory is what gives us confidence that the interventions we are implementing are beginning to yield results,” Dr Muradzikwa said.
She added that more pension funds were now introducing year-end bonuses for pensioners, a development the regulator views as another sign of improving welfare for retirees.
The Commissioner said IPEC was simultaneously intensifying efforts to recover outstanding pension contributions from employers through enhanced enforcement powers.
She said the introduction of garnishee powers had already started producing tangible results.
“We now have queues of employers coming to the commission to negotiate payment plans. They are paying their outstanding contributions, and we are seeing meaningful reductions in contribution arrears,” she said.
The enforcement measures form part of broader efforts to strengthen compliance across the insurance and pensions industry.
While life assurance companies have maintained strong compliance levels, Dr Muradzikwa said micro-insurers were currently leading the sector with a compliance rate of 90 percent.
However, she expressed concern over the performance of funeral assurance companies, warning that the regulator would not hesitate to impose sanctions on non-compliant operators.
“We have read the Riot Act to the funeral sector. We have intensified targeted inspections, and we are prepared to escalate regulatory sanctions where necessary,” she said.
Beyond enforcement, IPEC is also seeking to strengthen the financial resilience of the sector through tighter capital requirements, improved governance standards and enhanced oversight of insurers supporting local operators.
The regulator has introduced minimum accreditation standards for foreign insurers and reinsurers seeking to operate in Zimbabwe.
“We want to be comfortable that the securities behind our industry are secure securities. Regardless of where you come from, you must go through an accreditation process with IPEC,” Dr Muradzikwa said.
As part of efforts to diversify investment portfolios, she encouraged pension funds to increase offshore investments.
Although regulations permit pension funds to invest up to 15 percent of their assets outside Zimbabwe, actual exposure remains significantly below that threshold.
“Despite all the calls for offshore investment, the exposure is only six percent. There is still considerable headroom, because pension funds are not fully utilising the available limit,” she said.
Dr Muradzikwa also highlighted innovation as a key priority, saying IPEC’s recently launched regulatory sandbox programme had attracted strong interest from industry players.
The sandbox allows insurers and pension funds to test new products in a controlled environment before full market introduction.
“We are currently sitting on about 10 applications for new products, and several others are at various stages of completion. We are ready to evaluate these products and allow them to be tested in a controlled environment,” she said.
However, she acknowledged that Zimbabwe still faces significant challenges in expanding insurance coverage.
“Insurance penetration currently stands at 1.6 percent, up from 1.1 percent in 2019, but remains well below the National Development Strategy 2 target of four percent. We still have a lot of work to do to move from 1.6 percent to four percent,” Dr Muradzikwa said.
To accelerate growth, IPEC is promoting agricultural insurance, micro-insurance and pension products tailored for small and medium-sized enterprises.
The commission is also pursuing strategic initiatives, including insuring government assets, domesticating marine insurance and introducing insurance products for artisanal miners.
“We cannot continue to have government assets uninsured. We are working with the Ministry of Finance and industry players to ensure this becomes a reality,” she said.
Dr Muradzikwa said IPEC was also working to integrate insurance education into the national school curriculum to improve financial literacy and increase long-term uptake of insurance products.
She further reaffirmed the commission’s commitment to resolving one of the most contentious issues in Zimbabwe’s pensions sector: compensation for pension losses incurred during the 2009 currency reforms.
According to Dr Muradzikwa, ongoing engagements with government and stakeholders are aimed at fully implementing the compensation programme and rebuilding confidence in the country’s pension system.
