Online Reporter
Online Reporter
THE Insurance and Pensions Commission (IPEC) says pension benefits in the country are still below expectations.
Addressing the 50th Zimbabwe Association of Pension Funds (ZAPF) annual conference in Victoria Falls today, IPEC director of pensions Mr Cuthbert Munjoma said: “Three years ago, we introduced a benefits tracker, which tracks pension benefits on a monthly and quarterly basis.
“The benefits are not meeting reasonable expectations. We do understand this is due to a number of factors, such as the adequacy of contributions and sustainability issues.
“We have instituted a number of reforms, but there is room for holistic reforms.”
Zimbabwe’s pension funds are facing several significant challenges, including the unresolved loss of value issue, which has resulted in pensioners losing a significant portion of their savings; poor governance practices, inadequate skills and poor risk management and high contribution arrears as some employers are failing to remit pension contributions.
Official data shows that as at the end of December 2024, pension contribution arrears – including those accumulated from prior years, stood at US$268 million, up from US$6,.8 million.
Local pension funds have also struggled to find effective investment strategies, leading to poor returns and further eroding the value of pension savings.
Presenting at the same conference, World Bank lead financial specialist Fiona Stewart highlighted that proper governance of pension funds is critical for effective investment portfolio diversification.
As at the end of last year, Zimbabwe’s pensions industry was composed of 967 registered occupational pension funds.
Of the 967 registered funds, 489 were active, constituting 50,6 percent of the industry’s total funds.
The remaining 478 funds were inactive, with 372 set for dissolution pending finalisation of the pre-2009 compensation.
This year’s ZAPF conference is running under the theme, “50 years: Shaping tomorrow, today – Building on the past, embracing the future”.
