This comes as it emerged that some local authorities were not forwarding money to pension funds despite deducting the funds from employees’ salaries. “Contributors can take legal action against the employer although this may not help if the employer is facing financial and viability problems,” Ipec said in response to written questions.
A number of pensioners are facing delays in receiving their money, as pension funds claim they have no money and pass the buck to employers, whom they blame for delaying with remittances.
First vice-president of the Urban Councils Association of Zimbabwe, Thaba Moyo last week said despite indications that pensions were being deducted, local authorities were not remitting to the pension fund as they did not have money.
He said deductions were only on paper, yet in reality, the councils did not have money and were not remitting anything.Ipec said it was in consultation with local authorities and employers, warning that failure to remit pensions was illegal and the commission may be forced to intervene to stop the rot.
“The concerned employers have been reminded that deducting pension contributions and not remitting to the pension funds is both illegal and fraudulent and that they must take urgent corrective measures so that the pension fund members are not unnecessarily prejudiced,” the commission said.
Ipec said employers on the other hand have blamed the depressed economic environment for failure to remit funds, saying most companies said they were undercapitalised and were operating below capacity.
This, the commission said, hamstrung the pension funds, as their ability to pay was dependent on contributions being paid in time.“Failure to remit contributions deprives the fund investment income and further depletes the fund,” Ipec said. “This will inevitably lead to the fund failing to pay benefits.”
Labour and Social Welfare minister, Paurina Mpariwa (pictured right) despite repeated promises to respond to questions over the last two weeks still has not responded.
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She said the pensions issue was a delicate one and she needed to get the correct information before responding. She asked for questions in writing but did not respond.
The minister is also responsible for the labour portfolio in the MDC-T, a party that was born out of the workers movement, and her failure to comment means the party’s position on a matter that affects a great proportion of its support base, could not be heard.
Pensions administration split between two ministries
Confusion seems to reign supreme in the pensions sector, as government’s authority over pension funds seems to be split between two ministries, both of which seem to have overlapping jurisdiction.
Ordinarily the Ministry of Labour and Social Welfare is responsible for pension funds but this authority has since been passed to the Ministry of Finance.However, on the other hand, the Labour and Social Welfare ministry continues to supervise the National Social Security Authority (NSSA), which in turn oversees all pension funds.
