$30 million in unclaimed pension benefits lies idle

THE Insurance and Pensions Commission (IPEC) says about 50 000 pensioners could be wallowing in abject poverty while their unclaimed benefits amounting to $30 million lie idle at the pension benefit fund.  

The country's insurance and pensions' regulator said this was largely due to financial illiteracy and lack of  information by the pensioners.  

The unclaimed benefits could be subjecting the aged to unwarranted poverty, a move that goes against IPEC's mandate of enhancing economic wellbeing among the elderly and their dependents.

In a speech read on his behalf by his executive assistant Mr Cuthbert Munjoma during the 2019 Insurance and Pensioners Journalist Mentorship Programme in Harare on Friday, IPEC acting commissioner Mr Blessmore Kazungure said there was no better way of protecting consumers of financial products than imparting adequate knowledge regarding product features.  

"To us there is no better way to protect consumers of financial products than imparting adequate knowledge regarding product features, their terms and conditions, consumer rights, obligations and responsibilities.  "The primary pillar of consumer protection is financial literacy, particularly an awareness the elementary principles and statutes that governs the buying, selling or servicing insurance and pension products," he said.  

The media therefore plays a key role in informing the pensioners to ensure effective supervision of market conduct as well as educate the public about their insurance and pension rights.

"A case in point being the employees who are contributing to a pension scheme must check whether their contributions are being remitted to their respective pension funds.  

"Your duty as responsible citizens is to educate pension scheme members about their right to benefits when they are due and to constantly check their pension remittances by the companies," said Mr Kazungure.  

IPEC has noted that over $600million was in pension contribution arrears and this meant that if the trend continues unabated, those who are presently contributing may not get their pension benefits at retirement.  

Against this background, IPEC was working hand in glove with the National Social Security Authority (NSSA) and other stakeholders to embark on programmes aimed ensuring consumers of insurance and pension products were protected and informed.  

Addressing the same gathering, NSSA acting chief social security officer Mr Shepherd Mperi said it was still his organisation's mandate to pay the benefits regardless of the challenging economic situation.  He said it was up to the workers to make noise in situations where companies were collecting pensions but not remitting them to NSSA.

"It is up to the workers to blow the whistle whenever employers may be deducting contributions but do not remit them to us.

"It is them that suffer if the money does not reach the intended destination," said Mr Mperi.  

He said efforts were being made to develop a social security scheme for workers in the informal sector who constitute the bulk of the workforce in the country.

This comes at a time when lack of confidence continues to haunt the country's insurance and pensions industry due to the erosion of policy holder accounts which resulted from the transformation of value from the Zimbabwe dollar to the United States dollars in February 2009.

IPEC recently launched the Zimbabwe Integrated Capital and Risk Project, which is aimed at creating market discipline and improving confidence levels in the country's insurance sector.  

A brain child of Zim Select Financial Company, the 2019 Insurance and Pensioners Journalist Mentorship comprised 25 journalists drawn from across the country taking part in the training programme that was in its 3rd edition since its inception in 2017.  

All efforts are made in a move meant to promote stakeholder participation in the pensions and insurance industry.