IPEC moves to wrap up compensation
The Insurance and Pensions Commission (IPEC), says a working group has been established to facilitate closure on compensation of policyholders and pensioners for the loss of value suffered prior to 2009.
This follows recent recommendations by the Justice Smith-led Commission of Inquiry that insurance policyholders and pensioners should be compensated for loss of value suffered due to hyper-inflation in 2007-8 and Zimbabwe’s adoption of a multi-currency system in 2009.
In a pensions report for the third quarter ended September 30, 2020, released by IPEC recently, Zimbabwe’s insurance and pension regulator said: “With regards to loss of value complaints, a working group comprising representatives from IPEC, Zimbabwe Association of Pension Funds and the Life Offices Association has been established to review the compensation framework recommended by the Justice Smith-led Commission of Inquiry to facilitate closure on compensation of policyholders and pensioners for the loss of value for the pre-2009 period.”
During the quarter under review, IPEC said it handled 162 complaints in relation to pension matters, out of which 45 were resolved while 117 were yet to be resolved.
The regulatory authority said complaints on non-remittance were at various stages of resolution as some employers have submitted payment plans to their respective fund administrators while others have resorted to making part payments.
“Trustees are urged to ensure liquidation of the contribution arrears as required under Section 26 of the guideline for the insurance and pensions industry on adjusting insurance and pension values in response to currency reforms.
“Some of the measures trustees can pursue include imposing liens on assets, seizing and selling assets, initiating bankruptcy procedures, and negotiating Certified Repayment Agreements with sponsoring employers,” said IPEC.
Trustees and sponsoring employers were being urged to be cognisant of the stipulated interest rates to be used on contribution arrears as spelt out in the guidelines.
Furthermore, trustees should ensure annual benefit statements are submitted to members so that they are aware of their benefits status and contribution arrears, if any.
“Other complaints related to the delays and non-payment of benefits by pension funds, mostly owing to inadequate information on the part of beneficiaries.
“Pension fund members are advised to regularly update their details, particularly contact details as well as their nominated beneficiaries.”
IPEC has also indicated that the number of unclaimed pension benefits spiked to 154 957 as at September 30, 2020 from 57 815 in the corresponding period a year earlier.
The increase has been attributed to low benefits being paid out by the pension funds.
Given the high number of members unclaimed benefits, IPEC has urged pension funds to be proactive in empowering their members with knowledge on how to claim their benefits, through pre-retirement education programmes.–herald.cl.zw
