adminMartin Tarusenga
In their strategies to secure full rightful pension benefits for their members, pensioner organisations invariably appeal to incumbent pension fund boards of trustees to help the pensioner as members of the pension fund that the trustees are in charge of.Pension fund boards of trustees are, in terms of the Pension and Provident Fund Act of Zimbabwe, charged with the running of incumbent pension funds — the Act’s primary objective being to protect benefits accrued by members as provided for by the rules of the incumbent pension fund.
The Act thus requires the composition of the boards of trustees to be such as to protect pension benefits housed in the funds. In terms of this Act, pension funds are therefore distinct institutions/entities independent from employer organisations.
However, pensioner organisations appeals to each of the boards of trustees of the many pension funds whose members have sought assistance to secure their full rightful benefits, have received no response whatsoever from the boards of trustees.
This stance by the boards of trustees to ignore counter benefit proposals from the pensioner organisations’ internal benefit assessment services, is just the same stance adopted by insurance companies and related service providers.
Quite clearly, the boards of trustees stance to the appeals are in open dereliction of the statutorily stipulated mandate from members of pension funds in Zimbabwe.
A high level investigation of why pension fund boards of trustees can engage in such open dereliction of duty, reveals that pension fund boards of trustees in Zimbabwe are patronised, manipulated and controlled by employers, as a consequence of misleading advice from insurance companies and other such service providers.
Employers control the boards by interfering in the election of trustees to the boards by workers, such that only gullible and/or loyal employees, end up on the boards.
To this end, a significant number of pension fund boards of trustees in Zimbabwe are chaired by employees who unequivocally serve employer interests such as chief executive officers, finance directors, human resources managers, among others. Workers through worker’s committees are allowed to elect a few of theirs, in processes meddled with, again, by employers.
Typically, those thus elected by workers are ignorant about their role in the board of trustees.
In consequence pension funds in Zimbabwe no longer behave or operate as independent entities/institutions primarily serving worker’s interests in the fund, but rather as departments falling under employer organisations. In the circumstances, employers, at the instance of misleading advice from insurance companies, have taken to irregularly, fraudulently dictating pension benefits to pension fund members, ignoring the rules of the pension fund.
With employer subverted boards of trustees, pensioners and active pension fund members watch helplessly as their funds get looted. They cannot opt out of the pension fund, as employment contracts stipulate (irregularly), that joining the pension fund is a condition of service.
The media has over the years carried reports of monthly pension fund contributions being fraudulently diverted to the employer’s business, with no action from boards of trustees.
Pension fund assets such as real estate, equities, etc are sold with proceeds being diverted away from the pension funds — upwards of $12 billion is reported to have been diverted. Pensioners nationwide have been refused their full rightful pension benefits with Government acknowledging this apparent nationwide prejudice — still no action from pension fund boards of trustees.
A group of pensioners belonging to a large pension fund and whose appeals for several years had been ignored by both its board of trustees and the insurance company, reported that the chairman of the board of trustees was the human resources manager of the employer organisation, and also acted as the principal officer of the pension fund.
This chairman of the board of trustees makes unilateral decisions about the running of the pension fund, including on which insurance company should underwrite and administer the pension fund. The trustees ‘appointed’ to represent workers do not understand pensions, and only consider it to be a privilege to be in the board — they thus cannot help the appealing members. The pensioners each got pension benefits amounting to less than $3 000, having each participated in the fund for at least 30 years.
Benefit assessment reviews reveal that each of the members should get no less than $20 000 as their pot of assets. The employer, whose employees participate in this fund, has apparently not been remitting pension contributions for the last four years, despite that the employer was actually deducting pension contributions from the employees.
The board of trustees have not reported this non-remittance to the police and to the regulator of pensions IPEC, and neither has the insurance company reported the matter. It is clear that the chairman of the board of trustees, who is also the employer’s human resources manager will not allow the board to make such reports against his employer.
The insurance company’s silence about the non-remittance suggests some cosy unholy relationship between the employer, the human resources manager (also the chairman of the board of trustees) and the insurance company.
It is advisable for trade unions to end the subversion of pension fund boards of trustees by employers and insurance companies, and recover diverted pension funds.
The trade unions working together with the worker’s committees must demand a Trustee election process that is transparent and monitored by trade union representatives, by specialist worker sympathetic pensioner organisations, and by a non-partisan regulator.
Each of these observers must produce Trustee election reports validating the elections. Trade unions must then ensure that a comprehensive binding “job description” is in place for all boards of trustees.
The job description must be entrenched in the Pension and Provident Fund Act. The job description must emphasise the board’s responsibility to members of pension funds, outlining key trustee performance measures and frequency of trustee performance assessments.
Trustee performance assessments are to be conducted by pension fund members through their worker’s committees specialist sub committees. Such worker’s committees must have the option to consult specialist pensioner organisations.
Trade unions must further require minimum entry levels for any worker to be nominated as trustee, requiring at the very least that the nominee is not conflicted to the primary objective of the pension fund.
Entry levels must include minimum qualifications and pensions experience. All current trustees appointed with the employer objective to subvert pension fund boards of trustees must be removed.
To this end trade unions with their worker’s committees must prepare lists of trustees for each pension fund, detailing their qualifications, their experience, designation within employer organisations, the manner of trustees selection, information on any malpractices such as contribution non-remittance.
Strategies to dismantle all those evidently subverted boards, and to report all current boards not remitting pension contributions to the police as criminal cases must be put in place.
Martin Tarusenga is General Manager of Zimbabwe Pensions & Insurance Rights, email, [email protected] <mailto:[email protected]>; telephone; +263 (0)4 797020; Mobile; +263 (0)772 889 716. Opinions expressed herein are those of the author and do not represent those of the organisations that the author represent
Online Reporter