Some pensioners’ retirement was eroded at the height of the dollarization of Zimbabwe’s economy in 2009. These pensioners are set to be awarded compensation for pension value losses.
During the Insurance and Pensions Commission (IPEC)-organized media awards ceremony in Harare Wednesday, Finance and Economic Development Minister, Professor Mthuli Ncube, while addressing the guests, mentioned that crafting the framework for compensation was completed and regulations to guide the exercise now await gazetting. “The insurance and pensions industry is grappling with low confidence due to the low values that policyholders and pensioners got after the adoption of the multi-currency system in 2009. However, I am glad that finalization of the compensation exercise as recommended by the Commission of Inquiry into the Conversion of Insurance and Pensions Values from the Zimbabwe dollar to the United States Dollar, is almost done,” he said.
“The government expects that IPEC and the industry will expedite the compensation exercise, as soon as the regulations are gazetted. Compensation for the 2009 losses will go a long way in restoring confidence in insurance and pensions. We, therefore, need to work together and implement this exercise for the future sustainability of the insurance and pensions industry.” He also said the importance of the insurance and pensions industry to national development should be emphasized.
“The industry falls under the Macro-Economic Stability and Financial Re-engagement National Priority Area of the National Development Strategy (NDS1). As outlined in NDS1, the insurance and pensions industry, which is part of the financial sector, plays a vital role in ensuring sustainable growth through mobilizing savings, directing funds into productive sectors, managing risks, efficiently allocating resources, and facilitating the delivery of products and services. The government notes the pensions and insurance sectors’ investments in prescribed assets in 2022 amounted to ZW$74 billion and ZW$41 billion, constituting 7% and 9% of the industry assets, respectively.
“These levels are below the prescribed levels for the insurance and pensions industry, which is regrettable. I call upon the sector to comply with this statutory requirement. There is no justification for continued noncompliance considering that government now confers prescribed asset status even on private equity if it is of national importance,” said the finance minister.