PHILLIMON MHLANGA
More than half of Zimbabwe’s registered pension funds have ignored an Insurance and Pensions Commission (IPEC) directive which compelled them to re-register as the sector regulator seeks to establish a credible register of players in the industry, Business Times can report.
IPEC gave the players up to the end of September 2020 to re-register.
But, it emerged that only 440 out of the expected 961, heeded the call to re-register, meaning 54% of the country’s pension funds failed to register, according to IPEC’s latest report.
Some, according to IPEC, have claimed to have lost their original registration certifications, while others lacked IT capacity.
Others had provisional certificates which expired as far back as 2014.
This has brought a fresh headache for IPEC, which has been for the past few years battling rampant emergence of bogus insurance entities.
“(This) presents legitimacy concerns on their (pension funds) registration status,” IPEC said.
It was found that some sponsoring companies, which have been facing viability challenges, are no longer active.
IPEC had also ordered pension funds to re-draft their rules and re-register them with the regulator, to align them with changes in legislation and emerging international best practice.
However, some pension funds failed to submit their re-drafted rules despite the extension of the deadline to September 15, 2020.
By the end of September, only 561 re-drafted rules had been registered by September 30,2020, against 961 that were expected.
IPEC is unhappy that 42% of the pension funds failed to re-draft their rules, resulting in inefficient operations of the funds.
IPEC is now seriously considering penalising those that have failed to comply with the directive.
“The Commission notes with concern that there are some funds which have not yet submitted their re-drafted rules despite the extensions of deadlines to do so.
The second deadline for submission was 15 September 2020. In some cases, use of the old rules has resulted in inefficient operations of the funds.
The Commission is therefore calling non-compliant entities to comply, failure of which penalties will be levied,” IPEC said.
Total income for the pensions industry grew to ZWL$58.97bn during the nine months to September 30, 2020 compared to ZWL$2.69bn for the same period in 2019.
The increase was driven by fair value gains and interest on investments which constituted 54.76% and 31.59% of total income respectively.
In real terms, the value of the investment in property rose to US$671m from US$225m, reflecting a gain of US$446m.
On the other hand, the value of equities rose to US$366m during the reviewed period from US$244m.
