Zesa pensioners receive $20 monthly

HUNDREDS of Zesa pensioners are wallowing in poverty because their former employer, Zesa Holdings, has not been able to settle an over $100 million actuarial deficit it owes to the pension fund, NewsDay has established.

Most Zesa Pensions Fund members are holding their annual general meeting at Munyati in Midlands province tomorrow with the actuarial deficit issue on top of their agenda.pensioners are receiving a paltry $20 per month, an amount that can barely sustain a person for a week.

NewsDay is reliably informed that the lowest paid pensioners are receiving a paltry $20 per month while the highest are getting a little over $200 per month.

The matter has attracted the attention of insurance regulator, Insurance and Pensions Commission (IPEC), who have since sent a team of inspectors to Zesa Holdings to find out what measures the power utility had put in place to service the deficit and improve the lives of its pensioners.

The pension fund is known as a defined benefit scheme, an insurance term where a member will receive a specific payment when they reach retirement age.

However, the amount of benefit is calculated at the rate of the last amount the member was earning just before retirement.

The company will, therefore, have to pay for the shortfall which is known as an actuarial deficit.

IPEC acting commissioner of insurance, pensions and provident fund, Pupurayi Togarepi, confirmed the development.

"As at December 31 2011, Zesa Holdings owed the fund an actuarial deficit of $106 million which the company agreed to settle over 15 years by paying $6,4 million annually at a rate of $537 565 a month," Togarepi said.

He added: "We have sent inspectors to Zesa Holdings to check on many things, among them in adherence to pay the agreed monies to offset the deficit and if it is paying market-related rates for leasing Zesa Pension Fund buildings that should help the fund to review upwards the members' benefits."

Zesa Holdings corporate services director, Rufaro Pasipanodya was not reachable for comment.

Former Zesa Holdings board member and pension fund chairman Simbarashe Mangwengwende confirmed that the power utility owed the pension fund.

"It's true that the Holding company owes the pension fund through actuarial deficits amounting to over a $100 million and these debts have been reflected in the company's financial annual reports.

"I may not be aware of the current position since I left the board, but I can confirm that a payment plan to make monthly installments had been agreed," Mangwengwende said.

However, some of the pensioners fear that Zesa Holdings' failure to honour its obligations could result in many members dying without accessing their benefits.