IPEC sets new financial reporting guidelines for pension funds
HARARE – The Insurance and Pensions Commission has unveiled new Financial Reporting Guidelines for Pension Funds, which seek to enhance compliance and transparency in the pensions industry. This framework, according to IPEC Circular 1 of 2025, is designed to align local reporting practices with International Financial Reporting Standards (IFRS), addressing previous compliance issues and enhancing transparency for fund members.
The guidelines come in response to a series of concerns raised by the commission regarding non-compliance with IFRS, errors in audited financial statements, and inconsistencies in disclosures. The commission noted that these issues could undermine the trust of pension fund members and the overall stability of the financial system.
In 2020, the commission issued Circular 20 of 2020, requiring pension funds to adopt IFRS Accounting Standards. This was followed by Circular 24 in 2022, which stated that only pension funds with adequate resources should comply with IAS 29—Financial Reporting in Hyperinflationary Economies.
However, following the issuance of Circular 24 (2022), the commission observed that many pension funds received qualified opinions due to their failure to report under IAS 29. This non-compliance has led to distorted year-on-year comparisons, as historical figures were not adjusted for inflation. Additionally, the Commission noted that the ratios used to assess industry performance were misstated, and there were inconsistencies in disclosures, including departures from IAS 21.
Key changes introduced in the new guidelines include a mandatory requirement for all pension funds to fully comply with IFRS Accounting Standards. This includes alignment with several critical International Accounting Standards, such as IAS 26, IAS 29, and IAS 21, which govern the accounting and reporting practices for retirement benefit plans, financial reporting in hyperinflationary economies, and the effects of changes in foreign exchange rates, respectively.
One of the most notable updates is the requirement for pension funds that exclusively receive contributions in US dollars to prepare their financial statements using US dollars as the functional currency. This change aims to streamline reporting and ensure consistency across the sector. It also reflects a pragmatic approach to addressing the realities of the market in which these funds operate.
Additionally, the guidelines mandate more detailed disclosures, including descriptions of investment policies, changes to fund structures, and a breakdown of contributions between members and employers. Funds will also be required to provide age analyses for debtors and unclaimed benefits, enhancing the clarity of financial positions.
The commission has emphasised the importance of accurate and timely submissions, warning that late or partial submissions of required documents will result in regulatory sanctions. This move is expected to encourage pension funds to maintain rigorous reporting standards and uphold the interests of their members.
The new guidelines are set to take effect for audited financial statements with the year ending December 31, 2025, although early adoption is encouraged while the commission is currently taking comments on the guidelines.-finx
