The Commission of Inquiry into the Conversion of Insurance and Pension Values’ report that was made public through the Government Gazette last week makes interesting reading.
The inquiry was mainly on how insurers converted pension benefits from the Zimbabwe dollar to the United States dollar following the dollarisation of the economy.
Many pensioners out there found their contributions eroded overnight and they were paid paltry rewards by the pension funds.
These pension funds argued that the pensioners’ contributions had been wiped out during the hyperinflation period.
It is important to note that the commission’s report seeks to correct what many Zimbabweans viewed as unfair treatment of pensioners, who found themselves leading a life of penury despite having contributed huge sums to the pension funds.
In fact, it was money from the pensioners that sustained the pension funds during and before the hyperinflation period.
Naturally, pension funds do a lot of investment to ensure that they are able to hedge themselves against such unexpected encounters like hyperinflation. If they were investing such funds in immovable properties, they should surely be able at least to recoup the contributors’ funds, many argued.
Some people spent the whole of their working lives making contributions to such pension funds and for them to be given the paltry pensions was obviously an injustice.
The commission’s report is still before Cabinet and we hope that Government will come up with a position that will ensure that everybody benefits.
There are fears that setting unrealistic rates for the compensation of the pensioners might lead to the collapse of some pension funds.
This argument has been used by the pension funds in their bid to avoid compensating the pensioners at the desired levels.
We hope Government will not be swayed by the argument and should not let the pension funds delegate their responsibility. A careful assessment should be done on what impact will occur to the insurers if they compensate the pensioners.
We are looking forward to a win-win situation that will leave pensioners smiling, while the insurers are able to continue with their business.
Government should also consider the suffering that many pensioners went through on being told that their pensions had been eroded and that they were retiring with virtually nothing to show for it.
These affected people went through a lot of trauma and some of them might have died from the shock. What raises a lot of eyebrows is that multinational pension firms were declaring excessive profits from their real estate and property businesses during the same period.
To think that the same real estate businesses were being driven by the contributions from the same pensioners makes the case for compensation even stronger.
Actually, many people who were affected by the unfair calculations of their pensions had contributed to the pension schemes decades before the hyperinflation period.
Why the pension schemes overlooked the worthiness of such contributions remains a mystery. We are aware that Government cannot put the blame on insurers alone, since they had become captive to the obtaining economic situation.
This is why we are urging Cabinet to come up with a strategy that will ensure pensioners are not disadvantaged and that insurers are able to continue in business.
The commission’s report, coming after a few years of much wait, is sweet music to the pensioners and policyholders.
Investigations covered the period 1996 to 2014 and looked into the operations of life insurance companies, pension fund administrators, stand-alone pension funds, funeral assurance companies, the Guardians Fund, Government’s pension system and the National Social Security Authority.