‘Pensions must be youth-inclusive’

Tawanda Musarurwa

THE country’s pension funds should be more youth-inclusive in their approach, Finance, Economic Development and Investment Promotion Deputy Minister David Mnangagwa has said.

Excluding youths from the pensions debate has adverse repercussions for the sustainability of pension funds going forward.

“When we speak about retirement and pensions, one would think we are talking about our senior citizens.

“Our young people are equally invested in making sure that we have a robust pensions industry, because young people also struggle with competing with their parents in the marketplace,” said the deputy minister, while addressing the fourth edition of the Zimbabwe Association of Pension Funds Principal Officers and Chairpersons Convention in Bulawayo on Friday.

“So, this is a cross-cutting issue that requires due attention.”

According to the United Nations Population Fund, Zimbabwe is “an extremely young country”, with over 60 percent of the population under the age of 25.

The growth of the country’s informal sector has also increased concerns over the retirement phase of the current youth population, as pension funds typically cater for formally employed persons.

Deputy Minister Mnangagwa said the Government is working to address these concerns.

“The development of the micro-pension framework is currently underway,” he said.

“Its implementation will go a long way in improving financial inclusion. This will encourage the informal sector that bloomed in the country to start to rethink and refocus on mapping out the future we want.”

The pensions sector contributes to economic development through mobilisation of long-term savings that drive investments and long-term infrastructure development.

He urged the pensions industry to make timely submissions to next year’s National Budget:

“I am also glad that the conversation on this theme comes at an opportune time, when the 2024 National Budget preparations are underway. I, therefore, urge the industry to take advantage of this perfect timing and come up with policy and regulatory proposals aimed at achieving sustainable pension funds.”

The deputy minister said Government remains committed to ensuring an efficient macro-economic environment for pension funds.

“Government has demonstrated an unparalleled commitment towards improving the pension industry, through passing policies that aim to modernise the regulation and supervision of the pension industry, including, but not limited to the following: Circular 13 of 2019 — Authority to offer selected insurance policies in Foreign Currency; Circular 7 of 2020 — Payment of Premiums in Foreign Currency for the Zimbabwe Dollar Premiums, in line with Statutory Instrument 85 of 2020 and Exchange Control Circular No: 3 of 2020; Circular 39 of 2022 Gold Coin Investment by the Insurance and Pensions Industry; Granting of Prescribed Asset status for private sector projects that have national development impetus, and continuous engagement through submissions (Mid-Term and National Budget submissions) and meetings,” he said.

Treasury has, however, also called upon the sector to revisit some of its policies, including investment and risk management policies, and to address governance issues.