Vusumuzi Dube
Judith Phiri ,Business Reporter
THE Insurance and Pension Commission (Ipec) has said unclaimed benefits increased significantly to $15 billion during the first quarter that ended 31 March 2023, driven by investment income and revaluation gains.
In its quarterly report, Ipec said the increase in unclaimed benefits during the period under review was 23 percent compared to ZW$11,6 billion as of 31 December 2022. An unclaimed benefit is any lump sum or pension benefit that is due to a retirement fund member that has remained unclaimed for a period of time.
Compared to the first quarter of 2022, Ipec said: “It is important to note that the increase in asset value of unclaimed benefits is not only because of an increase in the number of unclaimed benefits, but also due to investment income and revaluation gains passed on to unclaimed benefits which are still within the funds. In comparison with Quarter 1 2022, the amount of unclaimed benefits increased by 241 percent, from ZW$4,4 billion to ZW$15 billion in Quarter 1 2023.”
The Commission said total membership for unclaimed benefits during the quarter under review decreased by 27,77 percent to 105,726 compared to 146,370 as of 31 March 2022. It said the decrease was a result of Clothing industry pension fund reclassifying 18,334 of unclaimed benefits membership to suspended pensioners.
“The pensions industry comprised 978 registered occupational pension funds as of 31 March 2023 compared to 984 funds as of 31 March 2022. The decrease was a result of funds whose dissolution was concluded during the second to the fourth quarter of 2022 as well as consolidation of small funds to already existing umbrella funds.”
The Commission said of these, 552 were active, constituting 56 percent of the industry’s funds while the remaining 426 were inactive.
It said a total of 373 funds among those classified as inactive were undergoing dissolution while the rest were in paid-up status.
“The industry’s total membership including beneficiaries, decreased to 952,444 as at 31 March 2023 from 954,403 as of 31 March 2022. The decrease was mainly attributable to dissolutions and exits by fund members during the period under review.”
“The industry’s assets as at 31 March 2023 stood at ZW$1,95 trillion, which was a nominal increase of 299 percent from a value of ZW$488 billion as of 31 March 2022. The nominal increase in the asset base was mainly driven by quoted equities and investment property. The real increase in industry assets was 113 percent.”
The Commission said investment properties accounted for ZW$924 billion as of 31 March 2023 compared to ZW$163 billion during the comparative period last year, which was a nominal increase of 467 percent.
It said the benefits liability for suspended pensioners for the first quarter was ZW$607 million, while in terms of membership, there were 33 072 members under suspended pensioners.
During the first quarter, the Ipec issued seven circulars, specifically for the pensions industry.
“These circulars are targeted at guiding and informing the industry of the latest developments and regulatory expectations in pension fund management and administration with much focus on the interest of pension fund members.”
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