eBusiness Weekly
Martin Tarusenga
A pensioner, by the name Mr Shonhiwa, holding two Old Mutual retirement annuity policies, cited in the media submitted the enduring questions to IPEC Commissioner, why IPEC has not categorically qualified higher benefit valuation by his assessors as compared to those calculated by Old Mutual, but essentially qualifying the niggardly Old Mutual calculated benefits, Mr Kazengura (the IPEC Commissioner) would respond that they are looking for a “professional” to calculate his benefits correctly.
Notwithstanding the IPEC Commissioner’s apparently veiled spiteful unprofessional bias against Mr Shonhiwa’s assessor, the Commissioner’s response was an acceptance that they did not have such a professional in IPEC. A more categorical acceptance that they (IPEC) have no capacity to resolve pensioner problems would be given by IPEC to Mr Rangarira via the IPEC WhatsApp Group, when IPEC responded that they (IPEC) did not have the capacity to calculate rightful benefits as yet.
True to the conclusions made in the articles “Insider-outsider labour market tactics key to pensioner prejudice”, and “IPEC cannot resolve pensioner problems”, and contradictory to IPEC press statements that IPEC will help pensioners, IPEC is incapable of delivering on its primary regulatory role, with dire consequences to pensioners, and the snafu circumstances that the pension and insurance industries find themselves in, and much to the very awkward/odd circumstances that it (IPEC) finds itself, in the face of the public.
But in the bid to stay in the job they (IPEC) clearly can’t do, they have engaged in activities aimed at diverting public attention away from their evident failures. Some of the activities are clearly peripheral to the core activities of a regulator and clearly not befitting of IPEC. Media adverts and articles show for instance that it (IPEC) is proceeding to source for an Actuary, to propose pension “reforms” which turn out not to be reforms at all, and to engage a compensation program.
Apart from the introduction of mandatory contributions and the so called Umbrella Fund, suggested in this announcement, there is simply no reform at all. With regards to the more mandatory contributions from pension fund members, IPEC cannot ask for more when it cannot account for those already made for many years and which should have converted to valuable pension benefits.
This is just a gross breach of crisis resolution strategies requiring a thorough examination of what transpired with the contributions already made, then an examination of what should have been done and finally the way forward (i.e. the crisis resolution).
There is ample evidence that the public is now aware that they (IPEC) do not want to go this way as they slept over the job and would like to continue so sleeping on the job, prejudicing pensioners. With regards to the so called Umbrella Fund, it is being introduced for the same reasons to cover up for IPEC failures and more sinisterly to protect insurance companies and pension houses that raided pensioner contributions.
The NSSA pension provision, Defined Benefit and Defined Contribution private occupational schemes, private individual provision through insurance policies and other individual savings are all existing pillars of pension provision in Zimbabwe – nothing new.
Presumably, the sourcing of the actuary is in fulfilment of the promise that the IPEC Commissioner made to Mr Shonhiwa to look for a professional to sort out cases such like Mr Shonhiwa’s case, that they have not been able to resolve for years. But in good governance these errant IPEC management cannot be the ones to put in place such corrective action on themselves, as they will do it in a partisan and opaque way, without accountability.
As if the latter awkwardness is not enough, it is not even clear whether an actuary is the solution to the problems that pensioners are in, and the snafu state the industries find themselves in.
This is because firstly the same actuaries misled the incapable and hence ‘‘blind’’ IPEC management into the problematic prejudice that pensioners are in today, and secondly it is because it is the same incapable management and Finance Ministry officials dictating the same ineffective solutions.
To be sure the problems faced by pensioners in Zimbabwe, and hence by the pensions and insurance industries overall, cannot be configured from a perspective of the traditional actuarial methods as applied in stable macroeconomic environments, such as the UK from which most of the actuaries practising in Zimbabwe are trained by correspondence. Attempts to mimic the application of these methods in such stable environments, in a macro-economically unstable Zimbabwe have precipitated the problems now faced by pensioners.
The problems require an invocation of the principles of social justice, and hence of equity. In order to avert inequity all factors, or variables affecting benefits due from pension and insurance contracts must be interpreted correctly in the context of Zimbabwe, technically or otherwise.
For example, it would be inequitable to use a 2008 Zimbabwe salary to an accountant retiring in the same year, and then use a 2010 US$ salary to an accountant from the same scheme with the same participation period, same grade, etc.
This consideration alone calls for intricate evaluations that would not occur to the traditional actuary. Add to this other considerations such as accounting of contributions into pension schemes, and the assets building there-from, over very many years, complex evaluation modules, that have to be chain-linked, emerge.
From information available such methods have not been developed in Zimbabwe, except for their rudiments as operational in pensioner organisations, and used for their advocacy and in courts.
A paper submitted to the Justice Smith Commission of Inquiry, yet to be published, provides indications of the full extent of the problem. The paper would be dumped in apparent meddling with the Commission, just like most other evidence would be dumped by this Commission.
It is misleading for IPEC’s Mr Kakwere to announce that IPEC will be coordinating a compensation programme, when the Parliamentary Portfolio Committee on Finance and Economic Development announced that they would hold a longer session to debate the gazetted Report of the Commission of Inquiry on conversion.
It is an independent body incapable of being meddled with that can resolve the problems faced by pensioners, not the IPEC stunts to divert public attention from their failures. Pensioners are looking up to the President and his team to intervene expediently and help their desperate situation.
Martin Tarusenga is General Manager of Zimbabwe Pensions & Insurance Rights, email, [email protected]; telephone; +263 (0)4 797 020; Mobile; +263 (0)772 889 716. Opinions expressed herein are those of the author and do not represent those of the organisations that the author represent
