'Pensioners to be paid in US dollars'

THE Insurance and Pensions Commission (IPEC) has engaged the World Bank to come up with a model aimed at ensuring policyholders and pensioners who paid premiums and contributions from 2009 to February this year are paid in United States dollars or the equivalent at prevailing market rates, an official has said.

IPEC public relations manager Mr Lloyd Gumbo revealed this while responding to questions at a workshop on insurance and pensions in Bulawayo last Wednesday.

Mr Gumbo said the World Bank was already working on the indexation model to be used as the benchmark for contributions made in United States dollars since 2009, before the introduction of the floating of the RTGS dollar through the Monetary Policy Statement in February this year.

"The World Bank is helping us with technical assistance to provide guidance on how policyholders and pensioners who were paying premiums and contributing from 2009 to 2019 will be compensated. The model will assist us in solving the issue of policyholders and pensioners who contributed in US dollars since 2009 and bank transfers following the introduction of bond notes and coins in 2016," said Mr Gumbo.

Mr Gumbo added that the regulator was working on decentralising its services including opening satellite offices across the country with the first one being in Bulawayo in the near future.

Mr Gumbo, speaking at another workshop in Kwekwe said pensioners should be patient while the framework to compensate contributions were being finalised.

He said IPEC has already appraised the Parliamentary Portfolio Commission on Budget, Finance and Economic Development of their concerns on the envisaged compensation law. For that reason, Mr Gumbo said, they expect the matter to be expedited once tabled in parliament because the portfolio committee also wanted closure on the issue.

"The issue of contribution arrears is a major concern to us as a Commission because it means you may not get benefits that are due to you. Even now, there are some companies that are deducting contributions but not remitting to pension funds. Contribution arrears stood at about $600 million as at 31 December 2018 with local authorities owing about $200 million."

He said IPEC had proposed amendments to the Pension and Provident Funds Act that will see decision-makers at companies that deduct but do not remit contributions being held accountable at law.