Pension Funds begin implementing long-awaited compensation programmes
LIVINGSTONE MARUFU
Pension funds have finally begun implementing long-awaited compensation programmes for pensioners and policyholders who lost their life savings when Zimbabwe dollarised in 2009, Business Times can report.
It is estimated that Zimbabweans lost investments worth over US$3 bn during the chaotic currency conversion process that wiped out pensions, insurance policies, and long-term savings.
In a written response to Business Times, the Insurance and Pensions Commission (IPEC) actuarial director Robson Mtangadura confirmed that the compensation process is now underway in line with Statutory Instrument 162 of 2023, with visible progress across several pension funds.
“The process is ongoing across different pension funds and payments are being made progressively as approved compensation plans are implemented. The total amount paid to pensioners so far is about US$455,000, while just over US$121,000 has been credited to active members,” Mtangadura said.
He explained that the exercise involves a complex verification and reconstruction process of historic data from the hyperinflationary era to ensure fairness and consistency across the sector.
“Each fund’s compensation plan must be independently validated, actuarially reviewed, and approved by IPEC before implementation, which has contributed to the time taken,” Mtangadura added.
Despite the time-consuming and technically demanding process, Mtangadura said IPEC remains determined to bring closure to this long-standing issue.
“The actual timelines will be determined by the speed at which the draft Compensation Regulations, currently before the Attorney General’s Office, are gazetted. In addition, timely disbursement of funds by both Government, pension funds, and insurers will be critical for the expeditious conclusion of the matter,” he noted.
Mtangadura revealed that a number of pension funds have already submitted their compensation plans to IPEC for review and approval, paving the way for payments to qualifying pensioners and policyholders.
“Some pension funds have since begun implementing their compensation programmes, with others at various stages of approval and validation,” he said.
The compensation initiative stems from the recommendations of the Commission of Inquiry into the Conversion of Insurance and Pensions Values from the Zimbabwe Dollar to the United States Dollar, established in 2015 by the late former President Robert Mugabe.
The inquiry revealed that millions of pensioners were short-changed during the dollarisation process due to weak regulation, lack of transparency, and improper valuation of pension assets.
Under the new compensation framework, the insurance and pensions industry is expected to shoulder the responsibility of compensating affected members and policyholders, honouring its fiduciary obligation to those whose life savings were eroded during the transition.
