‘Relief’ for pensioners

PHILLIMON MHLANGA

The Insurance and Pensions Commission (IPEC) has directed all pension funds to increase pension payout by six fold to at least ZWL$36 000 per annum, a move meant to address the plight of pensioners who are struggling to make ends meet, Business Times can report.

Although, the proposed amendments are yet to be gazetted as law, IPEC has exempted the pensions industry, in terms of section 24 of the Pension and Provident Funds Act [Chapter 24:09], from applying the prescribed minimum pension of ZWL$6000 in the determination of commutation and preservation and start applying the ZWL$36 000 in the determination of commutation and preservation amounts, with immediate effect.

Business Times can report that pensioners who will receive ZW$36 000 and below as pension benefits per annum, have the option to receive their full benefits at once instead of having the money preserved for regular monthly payouts.

The new arrangement, however, does not apply to those pensioners who receive more than ZWL$36 000. These will continue to receive their monthly payouts.

IPEC commissioner, Grace Muradzikwa,  said IPEC felt the ZWL$6 000 per annum, which translates to ZWL$500 per month  and prescribed in terms of sections 21 and 24 of the Pension and Provident Funds Regulations, Statutory Instrument 323 of 1991 as amended by SI 91 of 2020, has become “very low considering the obtaining economic environment”.

“In response, the Commission submitted a proposed amendment of regulations prescribing minimum pensions to the Ministry of Finance and Economic Development. The proposed amendments are intended to review the minimum pensions upwards to ZWL$36 000 per annum,” Muradzikwa said.

She said the proposed amendments are yet to be gazetted as law resulting in the continued application of ZWL$6000 as the minimum pension.

“The Commission recognises the plight of pensioners, in particular the urgent need to cushion pensioners through an upward review of the minimum pension in the determination of the qualifying criteria for commutation and preservation purposes, to enhance the monetary value realised by exiting fund members through the application of a reviewed minimum pension in the determination of commutations, to promote the welfare of pensioners to take into account the current macro-economic environment,” Muradzikwa said.

She added: “The Commission hereby exempt the pensions industry, in terms of section 24 of the Pension and Provident Funds Act [Chapter 24:09], from applying the prescribed minimum pension of ZWL$6000 in the determination of commutation and preservation.

“In line with this exemption, the pensions industry shall apply ZWL$36 000 in the determination of commutation and preservation amounts. The application of this revised amount is with immediate effect.”

To add insult to injury, local banks hiked transactional charges as pressure mounts on the lenders.

The sharp rise in bank charges has infuriated Zimbabwe’s long-suffering pensioners, who said the fees banks were charging were a bitter pill to swallow as they erode their little pension payout.

Consequently, the National Social Security Authority (NSSA), a  pay- as -you -go pension scheme, is also going beyond social security to protect the vulnerable pensioners.

NSSA general manager, Arthur Manase, said the authority is negotiating with local banks to waive bank charges for pensioners.

“NSSA is going beyond social security.  We are negotiating with banks on waiver of bank charges,” Manase said.

Manase also said NSSA is establishing special clinics for pensioners and setting up a revolving fund for pensioners.

“These are a response to what the market expects us to do,” Manase said.