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WHILE pension benefits reflect asset performance, they still fall short of expectations, the Insurance and Pensions Commission (IPEC) has said, adding that this was an area requiring “constant tracking and attention”.
Speaking at IPEC’s recent 7th annual general meeting, Commissioner Grace Muradzikwa said the benefits were not “meeting reasonable expectations”.
Sustained enforcement of the expenses framework and vigilant monitoring of investments, she said, had led to a slight improvement in average monthly benefits.
Last year, the industry paid US$129 million in claims and benefits.
“I know very often there are a lot of concerns about the industry just collecting premiums and not paying, but this time around we are monitoring the claims that are actually paid,” she said.
“We still have concern around contribution areas which are impacting the liquidity to some pension funds, and we also have isolated cases of asset and liability mismatches emanating from the fact that most of the industry players are investing in real assets.”
Commissioner Muradzikwa said pensioners were asking for benefits that reflect contributions they had made over the years.
“It is IPEC’s goal to ensure that happens,” she added.
According to IPEC’s first-quarter 2025 pensions report, pension assets stood at US$2,5 billion, with insurance assets at US$1,02 billion.
The report indicated that 76 percent of the pension sector’s total asset portfolio was concentrated in investment properties, quoted equities and prescribed assets.
The commission is also lobbying for comprehensive pension reforms under the National Development Strategy 2 (NDS2, 2026-2030), a successor economic blueprint that is currently under development.
Mr Chrispen George, an analyst, said improving benefits is crucial for addressing poverty, vulnerability and limited access to social protection among the elderly.
He called for regular reviews of pension levels to keep pace with inflation and economic changes, alongside supporting income-generating projects.
Financial analyst Mr Malone Gwadu called for enhanced corporate governance and strategic, diverse investments at a micro-level to ensure pension contributions yield returns aligning with expectations.
He also stressed the need for a stable and predictable operating environment, noting that “a lot of value has been lost due to economic headwinds such as inflation and exchange rate volatility”.
Dr Muradzikwa also indicated that conclusively addressing the pre-2009 loss of pension values would significantly enhance confidence in the pensions industry. She, however, highlighted that there was strong commitment from the industry to resolve pre-2009 issues, where depositors, pensioners and investors lost value due to the currency changeover.
The pensions industry penetration rate is 2 percent, indicating substantial scope for growth if industry players develop products that resonate with client needs.
The Government, through the Treasury, is expediting the gazetting of amendments to Statutory Instrument (SI) 162 of 2023, which will unlock private sector compensation for the pre-2009 losses.
The SI, gazetted in 2023, already outlines compensation modalities, with the Government having commenced payments to its pensioners.
Online Reporter