…Construction projects ground to a halt
…Revenue contributions down 5% between February and March
TINASHE MAKICHI
The Construction Industry and Pension Fund (CIPF) is sweating over the 21-day lockdown which has seen the construction projects grounding to a halt culminating in subdued revenues.
Comparing contributions revenue receipts on a month on month basis, CIPF saw a 5% decline from February 2020 to March 2020 and the trend is projected to persist in the ensuing months as most construction works remain on hold in response to the lockdown period.
CIPF chief executive Elisha Ngunga told Business Times that the Covid-19 pandemic and eventual lockdown have impacted the Fund’s primary income which comes from contributions from the membership and contribution income has been reduced significantly given that this is mainly projects-based.
“Most of the construction projects have ground to a halt during the lockdown period in response to a national call for mitigation of the pandemic and this has unfortunately affected the Fund negatively as the contributions revenue is driven from these projects,” Ngunga said.
CIPF is a successor to the Building Industry Pension Fund which was established in July 1969.
It is registered under the Pensions and Provident Funds Act (Chapter 24:09) and constituted by Statutory Instrument (SI) 323 of 1991 as amended by SI 243 of 2006. Its rules and regulations are founded in SI 239 of 1992 as amended by SI 276 of 1995.
To date, CIPF has a membership of 41 855 from the initial of about 4 219. Ngunga said the Fund is also going to experience high expense to income ratios as majority of expenses are fixed and will continue to spiral upwards due to inflationary pressures and indexation to the exchange rates.
“However, the Fund is fully aware of this and will continue to pursue cost containment measures,” Ngunga said. He said the Fund is currently in the planning and scouting of potential business partners for the remaining phases but there are expected delays in this process due to the lockdown.
“Resultantly the project will be delayed in delivery, consequently deferring the revenue generation from the final product being the supermarket and other shops,” Ngunga said.
The Fund’s constitution and regulations are amended from time to time to align with laws of the country and changed circumstances. Objectives of the Fund are to provide for the payment of pensions and death benefits and to enable employers should they wish to do so, to provide past services pension benefits for their employees.
It is a Defined Contribution Occupational Pension Scheme and membership to the Fund is compulsory for all employees with designated trades in the construction Industry. The pension contributions are made up of the member’s portion and the employers’ portion. They currently contribute each five percent of the member’s wage/salary.
The Fund is administered for the National Employment Council of the Construction Industry in Zimbabwe by the nine appointed Trustees, four who are representative of the employees and four the employers of the industry and an Independent Chairman who is appointed by Council.
On projects CIPF acquired and built Msasa and Windsor Houses in Mutare, Mership and Mimosa Houses in Bulawayo, 697 Craig Allen, New Ardbennie in Harare and Thorngrove industrial shells in Bulawayo. The Fund also undertook development of the Stoneridge Housing Scheme to afford its membership access to decent housing
