Chronicle Editor
Michael Magoronga, Midlands Correspondent
THE Insurance and Pension Commission (Ipec) has expressed concern over companies and employers who are not remitting pensions contributions to pension funds saying this negatively affects pensioners upon retirement.
This comes amid reports that unremitted pension contributions had ballooned to $4,3 billion by end of December 2021.
Ipec pensions director, Mr Cuthbert Munjoma, said the non-remittance by employers has become a perennial problem, which is negatively impacting pensioners.
“Indeed, this has become a perennial problem, which involves some employers making paper deductions on pay slips but not remitting the actual contributions to the respective pensions funds,” he said.
“Some local companies have not been remitting pensions, which have now ballooned to $4,3 billion as at 31 December 2021,” said Mr Munjoma.
As a result, some pension funds are forced to pay very low benefits to pensioners as they try to play around with the little that they would have received from the employers.
“Some pension funds are paying very low benefits partly because the sponsoring employers have not been remitting pensions. Some local companies have not been remitting pensions for more than a decade and this has negatively impacted on pensioners,” said Mr Munjoma.
The proposed Pension and Providence Funds Bill, which is before Parliament, seeks to punish chief executive officers and finance directors who deduct pension contributions but fail to remit the same to pension funds.
Employers are required to remit deducted contributions to pension funds as failure to do so affects members who sometimes end up receiving reduced benefits or no benefits at all upon retirement.
According to Ipec, defaults in remitting pension contributions are one of the biggest challenges facing the pension sector.
In his speech to commemorate Workers Day, President Mnangagwa warned companies who are not remitting pensions urging employees to report and expose such.
“The incidences of non-remittances of pension for medical and pension by organisations, will not be tolerated. I call upon workers to expose situations where they notice corruption and maladministration within organisations,” said President Mnangagwa in his speech.
Mr Munjoma said the President’s speech shows that he has workers at heart.
“We welcome and highly appreciate President Mnangagwa’s speech particularly his call for employers to remit pensions,” he said.
“This shows that he is in touch with what happens and he has workers and pensioners alike at heart. We hope that the employers will take heed of the President’s call and start remitting their pensions,” said Mr Munjoma.
Online Reporter