Unclaimed benefits shoot to $1,6bn Dr Muradzikwa

Fungai Lupande Mashonaland Central Bureau

Around 169 000 Zimbabweans can expect an average of almost $10 000 each if they claim their share of the $1,67 billion pension benefits lying idle, Insurance and Pension Commission (IPEC) Commissioner Dr Grace Muradzikwa said yesterday.

Speaking during an IPEC/NSSA journalist’s mentorship programme held virtually yesterday, Dr Muradzikwa said the uncollected money will go into the Guardian Fund after five years and after 30 years will go to the Government.

She said non-collection of pension benefits was one of the challenges facing the pensions sector including significant forex contributions sitting in nostro accounts, reduced disposable income due to company closures, growing practice of awarding non-pensionable allowances and low confidence owing to hyperinflation.

However, Dr Muradzikwa said pension contributions increased by 242 percent from $440 million in March last year to $2,86 billion in March this year.

“The increase in pension contributions can be attributed to salary increases in response to inflation though salaries are not tracking inflation,” said Dr Muradzikwa.

“Pension asset base has increased by 494 percent from $29,81 billion in March last year to $177,12 billion March this year. 

“The increase was mainly driven by an increase in the value of investment properties, quoted equities and unquoted equities.”

She said the Covid-19 has had a negative impact on the insurance and pension sector with the supply chain and labour market disrupted.

The waiver of contributions by employers in affected sectors, paid up status is another impact of the pandemic.

“Retrenchment of some personnel, reduction in covers, rental income arrears increased and liquidity due to declining contributions are some of the impacts of the pandemic,” she said.

“However, every dark cloud has a silver lining. 

“The pandemic also came with a positive impact which is digitalisation which resulted in restructuring of key business functions. 

“Use of technology resulted in operational efficiency and some insurers offering premium holidays to clients in dire straits.” 

Speaking during the same meeting, Mr Cuthbert Munjoma from IPEC said failure to claim pension benefits defeats the purpose of insurance and the Commission is worried. 

“We are trying to understand why these benefits are unclaimed and some of the underlying factors include migration. A lot of people left the country for the diaspora in the early 2000s. 

 Another issue is data integrity. The quality of data and record keeping is poor. It then becomes difficult to track a beneficiary when information is not correctly captured. 

“Loss of value on conversion is also another factor.

“ Some benefits are as low as US$10 in some policies resulting in people not claiming them,” he said.

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