His dream of settling down at old age using his life investment has been shattered as he has received an unsatisfactory response regarding the value of his policy from Foundation Mutual Society (FMS).
“My policy matured in February 2009, but when I lodged my claim this year, I was told that I wouldn’t receive even a single cent. I had planned to buy a grinding mill, cows or build my house in the rural areas,” said Tongerai.
“I don’t know how long I have to wait until I can start receiving my money and realise the value of my 12-year investment.”
Contacted for comment, an official from FMS could only say that he would look into the issue.
Questions sent to the Insurance and Pensions Commission (Ipec) had not been responded to by Friday.
However, Ipec boss, Manett Mpofu, said it would be immoral for a company not to fulfill its obligations.
“We are aware of the turbulent environment we are emerging from but it would border on the immoral side to simply tell policyholders that their money paid as premiums over a number of years, simply disappeared into thin air,” she said.
Tongerai’s predicament is shared by thousands of pensioners in Zimbabwe who are being denied benefit payouts on policies they took, years before the country experienced economic depression.
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But Zimbabwe Pension and Insurance Rights Trust general manager, Martin Tarusenga, says FMS, among many others, breached the terms of their contracts, arguing that Tongerai would otherwise not have signed to the policy contract had the real rate of return not been guaranteed.“This maturity benefit works out to US$3 884,42 (Zim$34,128) when adjusted for interest to the 1st of March 2012 at a conservative interest rate of 5%. “This conservative rate is plausible when it is considered that FMS had undertaken to return at least 22% in real terms,” said Tarusenga.
The main purpose of a pension scheme or provident fund is to serve as a long-term investment vehicle, with the main objective of providing the contributor with a decent and reliable income upon retirement.
However, most pension funds and insurance companies have remained mum over benefit payouts citing disruptions caused by the hyper-inflationary period and the currency transition from Zimbabwe dollars to United States dollars.
Analysts say the poor performance of both the stock and property markets has led to limited growth of investment income, which has traditionally assisted the sector on claims management.
The conversions provided balances that were not commensurate with savings contributions made over several years leading to a probe instituted by Ipec over the fairness of valuations made.
