The Sunday News
Judith Phiri, Business Reporter
THE Insurance and Pensions Commission (Ipec) has deferred compensation payments to pensioners whose savings lost value around 2009, saying it received submissions that were not compliant with statutory provisions.
The payments were scheduled to start this month. The compensation payments were supposed to be done following the promulgation of Statutory Instrument 162 of 2023 (Compensation for Loss of Pre-2009 Value of Pension Benefits Regulations) on 29 September 2023.
Between 2007 and 2009 the country experienced a major hyper-inflationary period, which eroded the value of most savings including pensions.
The Government in 2015 constituted a Commission of Inquiry to investigate the causes and extent of the loss of value of life insurance policies and pensions suffered by policyholders and pensioners following the conversion of the Zimbabwe dollar policies to foreign currency in 2009.
Justice George Smith led the Commission of Inquiry, which found out that most policyholders and pensioners were prejudiced during the conversion process and recommended that they be compensated. Following the gazetting of the compensation framework last year, Ipec called on the industry to submit compensation plans for approval.
In a statement on Friday, Ipec said none of the 1 249 assessed compensation schemes were approved due to non-compliance with the provisions of Statutory Instrument 162 of 2023 (compensation regulations).
The regulatory authority said appropriate regulatory sanctions were being implemented in line with Statutory Instrument 162 of 2023.
“Ipec wishes to advise stakeholders that it received and assessed 1 249 complete submissions of the pre-2009 compensation schemes out of the expected 1 395 submissions. The outstanding 146 schemes were either incomplete submissions or no submissions at all.
“As a result, the actual payments, which were initially scheduled to commence in March 2024, will not be possible. However, some of the assessed 1 249 compensation schemes are close to fully complying with the compensation regulations and payments are expected to start upon approval of the schemes once they meet all the conditions,” said Ipec.
Ipec said it was actively engaged with each pension fund and pension fund administrator to enforce compliance within the confines of the law, adding that once a compensation scheme is approved, the pension fund will directly communicate with eligible members regarding the payment modalities.
It said it would also issue public notices through various media outlets to ensure that all targeted beneficiaries are informed of the compensation processes and modalities.
Last year the set timelines were from November to December being submissions of compensation plans, January (2024) for approval with February (2024) for payments. By June 2024, the process was expected to be completed, with no extensions.
However, due to the delays in starting the payments, it is not certain if the June target will be met. In July 2022, the Government committed US$175 million to compensate pensioners and insurance policyholders for value that was lost during the changeover from the Zimbabwe dollar to the multi-currency system in 2009.
