THE Insurance and Pension Commission (IPEC) has taken local companies to task over the non-payment of pension contributions after it emerged that arrears on self-administered funds were on the rise.
Report by Bernard Mpofu
The insurance regulator said despite registering growth, many companies were struggling to meet their pension contributions as the economy continues to underperform.
A self-administered fund is one whose assets are registered in its name.
The fund also has the autonomy to engage one or two asset managers to improve investment performance.
It, however, has stricter reporting requirements compared to an insured fund whose consolidated returns are done by the insurer.
Employers and employees jointly contribute 12,5% of salaries towards the voluntary pension contributions.
In its fourth quarter report on self-administered funds, IPEC said the sector reported contributions growth of 92% to close 2012 at $284 million (September 2012: $147 million).
IPEC raised a red flag after it emerged that arrears for employers contributions made to self-administered funds were on the rise.
“However, 43% or $122 million of the contributions were in arrears (September 2012:28% or $41 million).
“Various rehabilitative measures are ongoing . . . IPEC has engaged employers to tender payment plans in order to rectify such fund arrears in terms of the (Insurance) Act,” reads a report for the period ending December 31 2012.