The Commission of Inquiry set by the Government in 2015 to probe how pension and insurance benefits were paid out following a big outcry from pensioners and policy holders is expected to submit its report to President Mnangagwa early next year.
Pension fund values were badly eroded in values due to devastating hyperinflation, which soared to a record 500 billion percent in 2008 according to the International Monetary Fund.
The government wiped out the hyperinflation figures in 2009 when it abandoned the use of the Zimbabwe dollar for a basket of foreign currencies, but mostly dominated by the United States dollar, leading to what is now generally called dollarization.
Finance and Economic Development permanent secretary Willard Manungo told Business Weekly recently that the commission, chaired by Retired Judge Justice George Smith had submitted the report to the Ministry for onward submission to former President Mugabe but had not done so at the time he resigned mid last month.
“We will submit the report to the new President for direction on implementation,” said Manungo. However, indications are that pensioners and insurance policy holders could receive more payouts after they were heavily shortchanged during the conversion of their benefits.
According to sources, this was part of the recommendations made by the commission that further payouts be made to those who had received paltry benefits. Even without spelling out detailed scales of payouts in monetary terms – the commission said the payouts would be made from the assets that “survived” Zimbabwe’s hyperinflation.
While inflation is largely blamed for the loss of value of pension funds and policy holders’ wealth, analysts find no justification for paying out paltry amounts given some members had contributed for a long time even before the hyperinflationary era.
During preparatory meetings between the Ministry of Finance and Economic Planning and the Commission prior to the submission of the report to the President, it was suggested that Insurance and Pensions Commission be appointed implementing agent.
But some commissioners argued the insurance and pension regulator lacked capacity saying another commission should be set up to implement the findings.
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.