Online Reporter
Tapiwanashe Mangwiro, Zimpapers Business Hub
THE pension industry showed steady growth in the three months to March 31, 2025, as assets swelled on the back of revaluation gains and fresh investments.
However, concerns linger over fund consolidation and market concentration.
According to Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube’s Mid-Term Budget Review, although the number of registered pension funds ticked up marginally to 967 from 966 a year earlier, the value of assets surged.
A total of 479 pension funds remain active, representing 49,5 percent of the industry, while 488 are inactive vehicles, which no longer receive contributions, and continue to manage legacy assets and liabilities.
Some 372 of the dormant funds have been earmarked for dissolution under ongoing regulatory reforms designed to strengthen financial resilience.
Total membership, excluding beneficiaries, rose by 1,2 percent to 990 801 contributors, driven largely by new entrants into formal employment.
Industry assets surged to ZiG66,4 billion as of March 2025, a 13,9 percent jump from ZiG58,3 billion at the end of 2024, thanks to positive fair value adjustments in investment properties and equity instruments.
Investment properties and quoted equities now account for 65 percent of the pension funds’ portfolios, and sit comfortably within the 75 percent cap set by the Insurance and Pensions Commission.
Analysts say the upswing in the value of assets held by the funds highlights the industry’s growing capacity to support long-term social security and act as a source of stable capital.
“These results underline the effectiveness of Government-led reforms to modernise our regulatory framework,” said Mr Danmore Chakona, chief executive officer of ANX Assurance.
“Greater fund consolidation and enhanced investment guidelines are building trust among contributors, while diversification into property and equities bolsters returns over time.”
Mr Chakona pointed to the revaluation gains from real estate holdings as a welcome buffer against previous currency volatility and inflation, which were a chronic challenge for Zimbabwean savers.
“When pension schemes own quality assets, they can deliver sustainable benefits even in difficult macroeconomic conditions,” he noted.
However, critics warn that an over-concentration in property and stocks could expose funds to market cycle and liquidity risks.
“A 65 percent allocation to real estate and equities is high by regional standards,” argued banker Raymond Madziva. “While these assets have performed well during a rising market, they can become illiquid at precisely the moment funds need cash to pay retirees.”
Mr Madziva also cautioned that the planned dissolution of hundreds of inactive funds must be managed carefully to avoid displacing vulnerable beneficiaries.
“Consolidation makes sense, but it must ensure that benefits accrued under those dormant schemes are fully preserved and that members understand the transition process,” he added.
The Government argues that the rationalisation plan will enhance governance and reduce administrative overheads, ultimately benefiting contributors through lower fees and improved oversight.
“Our goal is a more transparent, professionally managed pensions sector that can attract institutional capital and provide reliable retirement income,” Prof Ncube said.
Bongani Ndlovu