CLOUDINE MATOLA
More than 50 delinquent companies run the risk of losing their assets after failing to remit pension contributions totalling over ZWL$173bn that were deducted from employees wages and salaries but never remitted to the respective pension funds, Business Times can report.
Trustees now have the authority to take stringent measures against sponsoring employers.
It is a criminal offence for companies to deduct pension contributions from employees and fail to remit to respective pension funds. According to pension regulations such as Section 2 (A) of Statutory Instrument (SI) 61 of 2014, and SI 323 of 1991, all companies are compelled to remit contributions into the pension fund within 14 days from the end of the calendar month to which the pension contribution relates.
Yesterday, 50 delinquent corporations who dominated the arrears chart were named and humiliated by the Insurance and Pensions Commission (IPEC).
The companies include Freda Rebecca Gold Mine, CAAZ, ZINWA, Chemplex, Allied Timbers Holdings, ZIMPLOW, ZFC, the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), the Zimbabwe Power Company (ZPC), ZESA Holdings and the National Railways of Zimbabwe , among many others.
The Insurance and Pensions Commission (IPEC) yesterday said these arrears are 30 days old and above.
“The Insurance and Pensions Commission (IPEC) publishes this notice in the public interest. IPEC hereby publishes the top 50 sponsoring employers, by value, with pension contribution arrears aged 30 days and above as at 31 December 2023. The purpose of this notice is to inform members belonging to these funds as part of the Commission’s disclosures,” IPEC said.
IPEC said pension contributions are supposed to be paid to the pension fund not later than 14 days after the end of each month.
“Employers that deduct pension contributions are required in terms of section 16(3) of the Pensions and Provident Funds Act [Chapter 24:32], to pay contributions to the pension fund not later than 14 days after the end of the month in which the contribution is payable,” IPEC said.
The surging arrears have also threatened the viability of the pension sector.
Apart from that, the non-remittance of pension contributions by companies has deprived members and their families of their entitlements in the event of retirement, death or other unforeseen developments.
These benefits can only be paid to beneficiaries whose contributions and premiums are up to date.
IPEC is calling upon all affected pension fund members to put measures to ensure defaulters pay the outstanding contributions and also the labour organisations to engage with employers.
“IPEC calls upon Members of Boards of the affected pension funds to put measures in place to ensure the defaulting employers remit outstanding contributions, for the benefit of their pension scheme members. In addition, labour organisations are urged to engage the employers who are not remitting pension contributions to protect members against old age poverty,” IPEC said.
In addition, the Commission urged members of boards and employers to fully understand the new Pensions and Provident Funds Act.
“Following gazetting of the new Pensions and Provident Funds Act [Chapter 24:32] into law in September 2022, employers and Members of Boards are urged to familiarise themselves with the deterrent provisions of the new Act regarding pension contributions,” IPEC said.
