The Insurance and Pensions Commission (Ipec) has approved the liquidation of Allied Banking Group Pension Fund, after it found it practicable to bring the fund into sound financial position.
By Fidelity Mhlanga
The liquidation of the group’s pension fund comes after the Reserve Bank of Zimbabwe cancelled Allied Bank’s licence in January 2015 on the grounds that the institution was no longer in a safe and sound condition.
“Notice is, hereby, given that the Insurance and Pensions Commission has approved the liquidation of the Allied Banking Group Pension Fund in terms of section10(1) of the Pension and Provident Fund Act chapter and section10.2 of the rules of the Allied Banking Group Pension Fund as at April 2017,” a statement released last week read.
Independent consulting actuary, David Mureriwa was appointed liquidator of the fund.
Allied Bank faced liquidity constraints and failed to attract a new investor to bolster its capital and liquidity position.
The bank was formed from the ashes of the then ZABG, then coalition of three troubled banks —Trust, Royal and Barbican.
As at December 31, 2015, Allied Bank Pension Fund’s beneficiaries were 437, while liabilities were at $452 242 against assets of $452 242.
Contacted for comment, Ipec commissioner, Tendai Karonga said: “Following the liquidation of Allied Bank, it was our considered opinion that the financial condition of Allied Bank Pension Fund was such that it was not practicable to bring the fund into a financially-sound condition within a reasonable time.
“The fund applied for paid up status following failure by the sponsoring employer, which is Allied Bank to remit pension contributions to the fund. The sponsoring employer failed to timeously meet its obligations to the fund in terms of contribution arrears as well as other assets that were invested with the same sponsoring employer. It continued to incur expenses, which, in the absence of any contributions, would mean the total fund would be depleted in the long-term.”
Allied Bank was placed under liquidation, which meant that fund members were now out of employment and could not make contributions to the fund