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Trust demands probe into the pensions commission

The call comes in the wake of a probe being carried out by IPEC concerning the correctness of the pensions and insurance benefits entitled or paid out by service providers to pensioners, pension fund members in general, and to insurance policy holders.

“This (investigation) is a matter of public interest, which must be conducted in a transparent manner and must publicly be disclosed, and the IPEC administration is a public office that must not hide anything from the public,” ZIMPIRT general manager, Martin Tarusenga told Standardbusiness.

Following the adoption of the multiple currency regime in 2009, most people’s Zimbabwe dollar savings were wiped out overnight, with pensioners and insurance policy holders being among major casualties of the currency transition.

Thousands of pensioners in Zimbabwe continue to receive pittances averaging US$20 to US$30 per month, despite having contributed consistently to such funds since the 1980s and before.

But Tarusenga said insurance firms and pension funds were supposed to provide cover for such economic risks in line with international best practices.
According to correspondence, IPEC agreed earlier this year at a meeting with ZIMPIRT to conduct an investigation on improper conduct by pension funds and insurance companies.

The letter states that service providers did not and (still) do not maintain accurate comprehensive data which would facilitate accurate calculation of pension and insurance funds member benefit entitlements.

“Service providers therefore, generally reneged on their fiduciary duty to maintain this data, for future reference,” reads part of the letter.

It was also noted that in some instances, service providers paid wrong benefit types, thereby forfeiting some of the members’ rights in the pension arrangement, such as deliberately paying a withdrawal benefit instead of a retirement benefit.

“Service providers paid arbitrary pension and insurance benefits and refused to substantiate how they arrived at the benefit amounts,” the letter said.

IPEC recently admitted that the insurance sector is inadequately regulated and the former would push for a raft of measures aimed at ensuring more disclosures.

Tarusenga said IPEC still has to publicly disclose the reasons for which it de-registered more than 1 000 pension funds in 2011 and why the funds were registered in the first place and whether this de-registration did not prejudice pensioners and members.

The pension funds were de-registered after failing to comply with the requirements of the Pension and Provident Fund Act.

Among the de-registered funds were those of mining companies, churches and clothing firm sectors.

“When did they realise that they (pension funds) did not comply? All of a sudden more than a 1 000 pension funds had not complied. Any fund de-registration is critically dependent on the financial soundness of the pension fund concerned (section 19 of the Act),” Tarusenga said.

“In this regard it must be taken into cognisance that the value of pension fund assets and their liabilities are already in dispute, hence the current investigation.”

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