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Pension conversion row heats up

23 Feb, 2018 - 06:02 0 Views
Pension conversion row heats up Willard Manungo

eBusiness Weekly

Business Writers
The blazing row emanating from differences within a high-profile commission of inquiry tasked to look into the conversion to US dollars of pension and insurance contracts originally in Zimbabwe dollars, has escalated amid reports that the matter has been taken to the Office of the President.

The process to correct the conversion of pensions from the Zimbabwe dollar era to the current US dollar regime has been in limbo for the past two years.

Documents seen by Business Weekly show that Zimbabwe Pensions and Insurance Rights Trust (ZimPIRIT) board of trustees acting chairman Thomas Kanjere wrote to Finance Minister Patrick Chinamasa on December 6, 2017. The letter was also copied to President Emmerson Mnangagwa.

In the letter, Kanjere appealed for the removal of all hindrances faced by pensioners over eight years in trying to secure their benefits from pension and insurance contracts.

He also calls for an investigation in the spirit of good corporate governance and if need be, corrective measures in the shortest time possible considering the long period that pensioners have waited.

The letter highlighted all hindrances, meddling which includes diversion of an August 2012 report meant for the Minister, conflict around retention of Insurance and Pensions Commission (Ipec) board members who have a regulatory function, and lack of transparency on appointment.

“The commission secretary’s activities throughout the inquiry lacked transparency and were contrary to the laid down acceptable procedures, appearing bent on manipulating the ultimate outcome of the Commission of Inquiry,” said Kanjere.

“The (Zimbabwe Pensions and Insurance Rights Trust) ZimPIRT submission to the Commission of Inquiry covers the full range of pension and insurance products and services subscribed to by our members over the years, and among other findings, shows that insurance companies got the benefit calculations wrong, that they prejudiced our membership in the process, and that the causes of prejudices include, the wrong benefit calculations, the history of hindrances cited above (excluding the recent interference with the Inquiry), irregular (fraudulent) demutualisations, fraud, overcharging and general negligence in many other areas of pension and insurance service provision.

“We humbly urge you to go through this ZimPIRT submission to the Commission of Inquiry as an alternative to the already disputed Commission report tampered with by the Commission Secretary,” said Kanjere.

The letter also alleges Ipec recruited officers without the technical skills, and experience necessary to resolve the problem of rightful benefits

“Honourable Minister it has been a long time since our membership has appealed to have the entitlement of rightful benefits from pension and insurance contracts. Over this period, a significant number of our members passed on without resolution of this problem. As I pleaded earlier on, on behalf of ZimPIRT, I humbly request you to assist with the following; consider our submissions on hindrances that our member pensioners and insurance policyholders have faced, over the last eight (8) years, in trying to secure their rightful benefits from pension and insurance contracts, investigate accordingly in good corporate governance, if need be and take corrective measures whenever necessary,” added Kanjere.

The saga has sucked in top ranking officials including Finance and Economic Development Permanent Secretary Willard Manungo and industry regulator Ipec.

The competence and composition of the commission has been questioned with allegations some commissioners are not qualified while Government’s involvement is widely contested as a glaring conflict of interest.

The process is flawed, according to a former commissioner Martin Tarusenga, who jumped ship two years into the voyage.

According to documents, a final report produced by the Pension Commission Inquiry late 2017 has been widely discredited due to messy developments leading to its compilation and production, which led to the resignation of Tarusenga on grounds governance procedure has been flouted.

An email thread of correspondence among the commissioners and with Government exposed various malpractices in the crucial process.

Tarusenga argued due process was disregarded when the commission carried out its duties with government officials and some interested parties meddling with the final report.

Set up in 2015 through a Statutory Instrument, the nine member commission chaired by retired Justice George Smith was tasked to probe the conversion process used to convert pensions and insurance benefits following dollarisation of the economy in 2009 amid concerns benefits were undervalued during dollarisation.

Pension fund values were eroded by hyperinflation which reached a record 500 billion percent in 2008 according to the International Monetary Fund (IMF).

However, pension funds hold assets worth $10 billion, divided into four main categories – the compulsory scheme, administered by the National Social Security Authority; the Public Service Pension Scheme; voluntary occupational pension funds; and personal pension plans.

The commission was expected to, among other things, produce a report and establish fully the total value of pensions, as at December 31, 2006 and as at March 31, 2009. The commission was also supposed to establish the value of old generation pension funds and the newer generation pension funds as of December 31, 2006 and March 31, 2009 as well as to establish an objective criteria for the delineation of old generation pension and newer generation pensions in both instances.

The commission would identify appropriate criteria for assessing whether any pension fund members or insurance policy holders have been prejudiced and to establish the extent of the prejudice if any.

Tarusenga, ZimPIRIT resigned from the commission in an October 13 letter to Justice Smith. He accused the commission of denying him the final copy of the final commission report on grounds a commissioner had leaked information to the media.

“I have now fully considered my circumstances and options regarding my status in the Commission and wish to resign from this commission, and to dissociate myself with the final commission report compiled after this date…,” Tarusenga said, adding the inquiry was meddled with by Ministry officials, in particular Willard Manungo and the Secretary to the Commission seconded by the Ministry.

He said the inquiry was not given adequate time, thereby leaving a significant number of Inquiry issues not fully answered while it was largely subjective relying mainly on sentimental views of Commissioners, and dispensing with literature review on many important matters of pensions and insurance provision in the Terms of reference.

Commissioners of the inquiry, wrote Tarusenga, were not treated equally with for instance some commissioners (as in his case) not being invited to put together the final report, and being refused the final report.

“The commission report in part held the views of the Ministry officials (and) the report denied Zimbabweans a chance to present fully their views,” wrote Tarusenga.

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