Zimbabwe's pension sector faces a mounting crisis

Zimbabwe's pension sector faces a mounting crisis as contribution arrears soar to a staggering US$93 million, prompting the Insurance and Pensions Commission (IPEC) to announce an aggressive enforcement crackdown against delinquent employers.

The pensions regulator revealed this week that thousands of workers and retirees risk losing their hard-earned benefits due to widespread employer non-compliance. Many companies continue to deduct pension contributions from employees' salaries but deliberately fail to remit the funds to the respective pension schemes.

"With the contribution arrears at this level, we are going to start garnishing defaulting employers," declared IPEC Commissioner Dr. Grace Muradzikwa. "Employers who deduct money but fail to remit it to pension funds will face the full force of our powers."

New data from IPEC shows arrears have surged by 37%, rising from US$68 million at the end of 2024 to US$93 million as of March 31, 2025. This sharp increase underscores what authorities describe as a deepening crisis threatening Zimbabwe's pensions industry.

Under Zimbabwean law - including Statutory Instruments 61 of 2014 and 323 of 1991, as well as the Pensions and Provident Funds Act [Chapter 24:32] - employers are legally required to remit deducted pension contributions within 14 days after the end of each month. Failure to do so constitutes a criminal offence.

Despite this, numerous companies have been accused of illegally diverting pension contributions to shore up their own cash flows, leaving pension schemes dangerously underfunded.

IPEC Board Chairman Albert Nduna echoed the Commission's tough stance, warning that defaulters will not be spared. "We are working closely with government and stakeholders to ensure garnishments and legal actions are swiftly executed," Nduna said. "There is no option but to act decisively to protect policyholders."

The fallout from the arrears is severe. Thousands of workers risk receiving reduced or no pension benefits upon retirement, while families may be left financially vulnerable if breadwinners die or become disabled before securing payouts.

"This behaviour is not just unethical - it is a criminal offence," Dr. Muradzikwa stressed. "Only members whose contributions are fully up to date can access pension benefits, including death and disability payouts."

The regulator emphasised that restoring trust in Zimbabwe's pension system, long plagued by underfunding and mismanagement, hinges on decisive action to improve remittance compliance.

With arrears now exceeding US$93 million, IPEC has drawn a firm line in the sand. Employers who fail to honour their pension obligations face garnishment orders, legal prosecutions, and reputational damage for endangering their employees' futures.

"As we flex our enforcement muscle, the message is clear - non-compliant employers will face the full consequences," Dr. Muradzikwa said.

IPEC, supported by government and other stakeholders, is finalising fast-track mechanisms to recover outstanding contributions and safeguard the retirement security of Zimbabwean workers.