Pensioners in quandary

Factmore Dzobo
“THERE is no end in sight to our paltry pension payouts. Our money is being invested in properties but they will never address anything concerning our plight. I was getting $20 a few months ago before it was increased to $40, which is still not enough for me to survive with my family of six.

“I need to buy food, pay rent and school fees from that allowance. I am very old now to continue working and I don’t have any other source of income apart from the monthly allowance,” said a former Belmor Clothing Industry worker, Mr Moffat Masuku (75).

Such is the sad story of thousands of pensioners in Zimbabwe who are struggling to eke out a living on meagre allowances.
Recently the National Social Security Authority (NSSA) increased pensioners’ monthly allowances by 20 percent, an increase that has been described by economic analysts as too little to cushion the suffering seniors.

“We do not know what the future holds for us, as we have for the past few years been getting little monthly allowances. My monthly pension allowance is useless.  Our pension contributions were invested in several properties before the country switched over to the multiple-currency system. Those investments are still generating profits. Why are our former employers and insurance firms not sitting down to negotiate with stakeholders to increase our monthly payouts?” said Mr Levy Mpofu (72).

Messers Mpofu and Masuku are bitter that after each of them dedicated over 30 years of loyal service to their former employers before they retired in 2008, they were told that their pension contributions were gobbled up by hyperinflation.

Many pensioners are struggling to make ends meet as their former employers and pension funds are failing to pay them well, despite profits they earn from pension fund investments.

Economic analyst, Mr James Wadi, said that the pensioners’ monthly payouts were still very low, adding that many of them are living in abject poverty. He said the Government should come up with plans to cushion pensioners. He said allowances are calculated in accordance with the individual’s fraction of contribution over their years of service which makes it difficult for companies to increase it after one’s retirement.

“It is also very difficult for the employers to increase the pensioner’s allowances as they are being calculated according to one’s contribution during the years of service. Benefits are affected by the contributory period, which might be low or higher, so the more you contribute the more you earn. I think Government should rescue pensioners as they are struggling to make ends meet especially those who retired during the era of hyperinflation. Government and insurance firms should come up with plans to increase pensioners’ monthly pay-outs,” he said.

Mr Wadi suggested that pension funds come up with a revised pension policy that would ensure regular and more meaningful increases in pensions.

“The Government and insurance firms should sit down with the employers and insurance firms and see how best they can increase pension payouts,” added Mr Wadi.

Mr Japhet Moyo, the secretary general of the Zimbabwe Congress of Trade Union (ZCTU), said there is a need for pension fund trustees and employers to study and find out how pension funds are being administered.

“I think the employer and pension trustees are not capacitated enough to access and find out how the pension funds are being administered and invested, so that workers and retirees can also be educated on how their pension contributions were invested and calculated.  It seems most pensioners are suffering due to lack of information on how pension contributions are calculated before they retire.”

Mr Moyo urged employers to train pension fund trustees who can be able to clarify the pension issues to workers before they retire. He said lack of knowledge had resulted in many pensioners being cheated by some insurance firms and employers.

“Lack of education about how the pension funds are being invested and administered has resulted in many pensioners being cheated by some insurance firms.  Employers and their workers need to train pension trustees for them to be able to articulate how the pension funds are invested,” said Mr Moyo.

Economist, Mr Kipson Gundani said: “While pensioners are crying foul over their little payouts, they should also take into consideration that some of the insurance and pension firms were also victims of hyperinflation and the Government at the moment does not have money to reimburse the lost money, hence every pensioner should also take this into consideration before demanding their monthly payouts increase,” said Mr Gundani.

He advised workers against waiting to rely on pension money after retirement, as it might not help because of the current volatile economic environment. He urged workers to invest while still at work than to wait for pension contributions benefits after one’s retirement.