By Staff Reporter

THE Insurance and Pensions Commission (IPEC) has paused the dissolution of pension funds to pave way for the conclusion of pre-2009 compensations to members who lost value during the hyperinflationary period from 2007-2008.

The country switched currencies ZWL to multi-currencies in 2009 after the zimdollar had become moribund.

According to the IPEC Pensions Report for the first quarter of 2024, 372 pension funds were earmarked for dissolution this year, with 15 of them dissolved during the period under review.

The Justice George Smith-led Commission of Inquiry constituted in 2015 recommended that policy holders who were prejudiced by the conversion process during dollarisation be compensated. It blamed the value erosion largely on poor regulatory enforcement and the demonetisation process for the local currency.

The Pensions and Provident Funds (Compensation for Loss of Pre-2009 Value of Pension Benefits) Regulations, 2023, were gazetted on September 29, 2023, through Statutory Instrument (SI) 162 of 2023.

 “Meanwhile, the commission has put the dissolutions on hold pending the conclusion of the pre-2009 compensation to ensure fairness among members,” reads the report.

Government has set aside US$175 million towards compensation efforts and pension funds were asked to come up with their frameworks and payment plans.

There were 966 registered occupational pension funds as of March 31, 2024, compared to 978 in 2023, during the same period. The decline is a result of 15 dissolutions that were finalised during the year. There were eight transfers and six new funds that were registered during the same period.

“Of the 966 funds, 481 were active, accounting for 49,79 percent of the industry’s funds. The remaining 485 funds were inactive as they were either paid up or earmarked for dissolution,” reads the report.

Of the total funds, 40 were defined benefit schemes, with the remainder being defined contribution schemes.