IPEC names and shames defaulting employers
Local authorities constitute the bulk of institutions that are not remitting to pension funds contributions they would have deducted from employees, a list published by the Insurance and Pensions Commission (Ipec) shows.
When sponsoring employers deduct pension contributions, they are required to remit the same to pension funds but a significant number of employers have not been doing so resulting in pension contribution arrears of $5,3 billion as at March 31, 2022.
Ipec has over the years raised concern over continued failure by some sponsoring employers to remit pension contributions to their respective pension funds to the detriment of pension scheme members.
“Employers that deduct pension contributions are required in terms of section 2 (a) of Statutory Instrument 61 of 2014 to pay contributions into the pension fund within fourteen days from the end of the calendar month to which they refer. Ipec has been receiving complaints from pension scheme members who have received reduced or no benefits owing to failure by their sponsoring employers to pension contributions after deducting the same,” it said in the notice.
The Commission also called upon the trustees of the affected pension funds in place to ensure the said employers remit outstanding contributions for the benefit of their pension scheme members.
“In addition, labour organizations are urged to engage the employers who are not remitting pension contributions for the purpose of protecting members against members of old age poverty,” it said.
According to Ipec, the National Railways of Zimbabwe tops the list, owing the NRZ Pension Fund $668,96 million, followed by the Harare City Council owing the Local Authorities Pension Fund (LAPF) $545,47 million.
The Zimbabwe Electricity and Transmission Distribution Company is owing the Zimbabwe Electricity Industry Pension Fund (ZEIPF) $331,02 million, Hwange Colliery (MIPF) $285,8 million and ZIMRA is owing the Zimra Pension Fund $202 million.
Notable companies that also make the list include Innscor Africa owing its pension fund $57 million and OK Zimbabwe owing the OK pension fund $17 million.
According to the Pensions report for 2021, there were 985 registered occupational pension funds as at December 31, 2021, compared to 967 funds reported as at December 31, with the increase resulting from new registrations and the correction by Old Mutual Life Assurance Company who had stopped reporting funds under dissolution.
Of these 985 registered funds, 606 were active, thus constituting 61,52 percent of the industry funds and the remaining 38.48 percent are funds, which were either paid up or funds undergoing dissolution as per directive issued by the Commission to dissolve inactive funds.
The industry’s total membership, excluding beneficiaries, increased from 881,336 reported as at 31 December 2020 to 916,991 as at 31 December 2021 attributable to new entrants and reinstatement of members for the purpose of allocating revaluation gains. According to the report, the industry’s asset base grew in nominal terms by 189 percent to $318.96 billion from $110.24 billion recorded in December 2020 as the values for major asset classes adjusted in response to inflation.
Ipec noted that the industry’s asset base of $318.96 billion translates to an average asset share per member including beneficiaries of $337,824.58 compared to $121,852 as at 31 December 2020.-The Herald
