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Business Reporter

Nearly a million Zimbabwe dollars lie unclaimed in retirement funds, which have been ravaged by inflation over time, as the low level of awareness among pensioners has led to eventual suspension of the benefits.

This has prompted the Insurance and Pension Commission (IPEC) to come up with new guidelines to reduce the prevalence of unclaimed pension benefits and suspended pensioners.

The new guidelines replace those issued last year following observation of continued misclassification of members and accumulation of unclaimed benefits resulting in over or understatement of member benefits. 

IPEC says it has noted inconsistencies in the factors taken into the classification of unclaimed or deferred benefits.

According to new regulations, the unclaimed benefits are the funds that have not been claimed by fund members when they became due because members could not be located for a period of more than six months. Suspended pensioners are individuals whose benefits are withheld by the fund on account of not providing proof of existence.

“Given the information asymmetry that may exist between the fund, administrators, and fund members, regarding the information required, steps should be taken to ensure that suspended benefits are resumed and unclaimed benefits and suspended benefits are accessed,” said IPEC. 

“It is critical to note that continued incidences of unclaimed benefits and suspended pensioners continue under the purpose of the pension industry, resulting in the decline in the uptake of products and services.

IPEC says classification of an unclaimed benefit or a pensioner as suspended shall not absolve the pension fund from pursuing measures at its disposal to locate the member, with benefit paid to the member of the beneficiary.

Fifteen days before the end of the financial year, pension funds will be required to publish a notice in the newspaper calling members to submit completed life certificates within 60 days.

Unclaimed benefits will remain kept in the fund for five years and where benefits remain unclaimed, administrators should lodge all such benefits with the guardian fund under the Master of the High Court with the schedules of names, addresses and amount of assets per each member. For the purpose of tracking records of unclaimed benefits, all fund managers will be required to file quarterly returns for the members.

The schedule should show the date the benefit was suspended while a schedule showing benefits lodged with the Guardian Fund shall also be attached. The schedule should show the pension increases and bonuses given to unclaimed benefits.

Fund managers should capture all the necessary information required to maintain communication with members.There must be constant communication on the need to update the database every quarter and IPEC is encouraging fund administrators to investors in information technology systems.

“All unclaimed benefits and benefits for suspended pensioners shall earn such bonuses, pension increases, revaluation gains, and any other returns that are distributable to the members in response to the movement in asset value or trends in the operating economic environment,” IPEC.