Delinquent firms face asset seizures

PHILLIMON MHLANGA

Zimbabwe’s delinquent companies face imminent asset seizures and bank account garnishments as pension contribution arrears balloon to a staggering US$93m, triggering an aggressive enforcement blitz by the Insurance and Pensions Commission (IPEC), Business Times can reveal.

The insurance and pensions regulator this week sounded the alarm, warning that thousands of workers and retirees risk being stripped of their hard-earned benefits due to widespread non-compliance by employers who continue to deduct pension contributions but deliberately fail to remit them to respective pension funds.

“With the contribution arrears, definitely you are going to see us garnishing defaulting employers,” IPEC Commissioner Dr. Grace Muradzikwa declared this week.
“Defaulting employers continue to deduct money from employees but not remit to pension funds. I tell you, we are going to flex our powers and start garnishing the employers.”

The development comes as fresh data obtained from IPEC this week 123shows contribution arrears surged by 37%, from US$68m at the end of 2024 to US$93m as of March 31, 2025, underscoring what authorities describe as a deepening crisis in Zimbabwe’s pensions sector.

The non-remittance of pension contributions is both a serious regulatory violation and a criminal offence, as outlined in Statutory Instrument (SI) 61 of 2014, SI 323 of 1991, and the Pensions and Provident Funds Act [Chapter 24:32].
Under these laws, all employers are legally obliged to remit deducted pension contributions within 14 days after the end of each calendar month.

However, many companies have been accused of illegally diverting these funds to prop up their own cashflows, leaving pension schemes dangerously underfunded.

IPEC Board Chairman, Albert Nduna, reinforced the Commission’s uncompromising stance, warning that delinquent companies will not be shielded from legal action.
“We are going to do this [garnishing]. We know the unfairness to the policyholders,” Nduna said.
“We are working together with government and other stakeholders on this. So, it’s an area where we have no option but to do that.”

The consequences of the arrears are far-reaching.

Thousands of workers could find themselves with reduced — or entirely lost — pension benefits at retirement, while families risk being financially crippled if breadwinners die or become disabled before payouts are secured.

“This behaviour by companies constitutes a criminal offence,” Dr. Muradzikwa emphasised, noting that only members whose contributions are up to date can access pension benefits, including death benefits and other critical payouts.

The regulator stressed that decisive action to improve remittances is critical to restoring public confidence in Zimbabwe’s pensions industry, which has been plagued by underfunding, mismanagement, and regulatory breaches.

With contribution arrears now exceeding US$93m, IPEC has drawn a firm line in the sand.

Non-compliant employers will face garnishments, legal action, and the reputational fallout of being exposed as companies that gamble with their employees’ future.

“As the regulator flexes its enforcement muscle, the message is clear — employers who fail to honour their pension obligations will face the full consequences,” Muradzikwa said.

The pensions watchdog, backed by government and other stakeholders, is now finalising mechanisms to fast-track garnishments and legal action to recover outstanding contributions and protect the retirement security of Zimbabwean workers.