By Own Correspondent

THE government and the Insurance and Pensions Commission (IPEC)  continues to dilly dally in finalizing the compensation scheme for employees who lost their investments  during  the pre-2009 hyper-inflationary era.  

During the 2007–2009 hyperinflation era, Zimbabwean pensioners saw their life savings practically wiped out, with some receiving lump sums as low as US$5 or even US$0.08. The currency transition in 2009 effectively reset and eroded decades of contributions, plunging many retirees into abject poverty.

At the peak of hyperinflation in November 2008, inflation reached an estimated 79,600,000,000%. Many pensioners who had contributed for decades received payouts that could barely buy a loaf of bread.

A 2015 Justice Smith Commission of Inquiry blamed poor regulatory enforcement by the Insurance and Pensions Commission (IPEC) and the flawed currency conversion methods used by insurance companies.

For years, pensioners and fund administrators clashed over "legacy issues," with many funds arguing that the 2009 dollarization reset their liabilities to zero. In late 2023, the government gazetted Statutory Instrument 162 of 2023, outlining regulations to compensate those prejudiced by the conversion process.

Nevertheless, the government and the IPEC  continue to go in circles with no tangible progress beig implemented to this end.

According to the timelines indicated in the SI, compensations should have commenced within the first quarter of 2024.

However, the compensation programme has largely stalled, with IPEC having approved just two compensation schemes, namely Mimosa and Amzim (which are both in the mining sector).

Many funds have data gaps, and there are funding shortfalls, leading to the need for amendments to the regulations to accelerate the process.

The Government has allocated US$25 million to assist with compensating civil servants affected by the erosion.

In an interview on the sidelines of the ongoing Insurance and Pensions Symposium in Victoria Falls, IPEC Commissioner Dr Grace Muradzikwa said SI-162 will be amended.

 “The pre-2009 compensation has been, unfortunately, protracted.But, I’m pleased to say we are at a stage where we have had a lot of consultation with the industry and we would like to amend the SI-162 of 2023 so that we can approve more compensation schemes,” said Dr Muradzikwa recently.

One of the key issues that has delayed the approval of most compensation schemes is the unavailability of granular data on the part of pension funds..

“The challenge is on the availability of (pensioners’) data. You find out that most of the pension funds have not been able to comply with SI-162 in its current form.

“So, the revisions will actually assist in making sure that we are able to approve more compensation schemes,” added the IPEC Commissioner.

The revisions are expected to allow the regulator to use alternative sources of data