LIVINGSTONE MARUFU
At least 3 540 vulnerable pensioners have received US$100 payouts each from Kuvimba Mining House as compensation for losses incurred during the 2019 currency reforms, it has been learnt.
The insurance sector regulator, the Insurance and Pensions Commission (IPEC) holds a 5% stake in Kuvimba Mining House and dividend proceeds for that investment have been earmarked for pension compensation.
The development was disclosed by Finance and Economic Development Minister, Mthuli Ncube.
“Government is in the process of compensating pensioners for losses incurred during the 2019 currency reforms. In this regard, following a dividend declaration by Kuvimba Mining House in 2021, a total of 3 547 pensioners from the first group of vulnerable pensioners have been paid US$100 each, translating to a disbursement of US$354 700, out of the US$400 000 apportioned to the compensation as at September 30, 2022,” Ncube said.
He added: “The first dividend tranche targeted pensioners and beneficiaries earning an annual pension below ZWL$1 000 as at 31 December 2020 and subsequent disbursements will be made once more resources are available.”
Ncube said the government was also making progress in the compensation of policyholders who lost value to hyperinflation in the decade to 2009.
The compensation, estimated to be more than US$3bn is expected to bring closure to the long outstanding matter.
Cabinet has already approved the draft regulations, which are expected to bring legal force to the compensation framework . The regulations will be issued in terms of the Insurance Act and the Pensions and Provident Funds Act.
The regulations outline the process of quantifying prejudice to members in line with the type of contract, that is, Defined Benefit, Defined Contribution, life insurance savings policies and personal pensions.
They also cover the calculation of prejudice for members of funds that converted from defined benefit to defined contribution. The sources of funding for the compensation are covered in the regulations with the exemption of government commitment.
The government commissioned the Justice Smith Commission of Inquiry in 2015, which culminated in a detailed report which was submitted in 2017 and adopted by Cabinet in 2018, in response to the public outcry.
In September 2018, the government then mandated IPEC to implement the recommendations of the Justice Smith Inquiry.
IPEC has since drafted regulations to complete the compensation processes with the regulations expected to be gazetted soon.
The amount of prejudice would be determined after the implementation of the compensation regulation and this will differ per each pension fund and the insurance company.
Insurance companies and pension funds have directed to submit compensation plans, showing compensation amounts and the eligible policyholders and pension fund members.
