The number of pension funds in Zimbabwe has dipped to 965 from a high of 4 000 underlining the tough economic environment, a pensions fund manager has said.
This was revealed by the Zimbabwe Association of Pension Funds director general Sandra Musevenzo when she appeared before the Parliamentary Committee on Budget, Finance and Investment Promotion led by Zaka legislator Clemence Chiduwa.
“We have got about 967 000 members, this includes active members, pensioners, beneficiaries, that is including spouses and children.
“And when you look at the assets that we have, as of this one, this is according to the Insurance and Pension Commission (Ipec) report, we are spending, I will give this number in dollars, before we even put this to see, it's ZWL$12,1 trillion, but in US dollar terms, that is US$2 trillion.
“But when you look at these numbers in our membership, you will note that before we dollarised in 2009, we had more than 4 000 pension funds, but right now as we speak, we are sitting at 965 pension funds, which shows that this number has been low.
“And of these 965 pension funds, you will note, just about 465 are active. Then you look at what are those challenges, what is the cause of this huge decline in our pension spaces.”
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She said the association had initiated various programmes to protect pensioners.
“We have improved regulation in government, I think through the Ipec, we have enhanced member protection, efforts that we're making.
“We are working on expansion of coverage, of which we are still calling for more because we can do more considering that our economy is now mostly informal, mostly through micro-pensions, but confidence has been lost.
“That is why most of our members do not believe in contributions. We have worked on a number of investment infrastructure projects.”
Musevenzo said the introduction of the Zimbabwe Gold (ZiG) would preserve and stabilise the value of pensions.
“The other positive impact of ZiG on pensions is that of transaction convenience as many of them actually need cash to transact in rural areas since that is where most of them reside,” she said.
“There is, however, a need to ensure that the ZiG is stable so that [there is] no further loss of value on assets denominated in local currency.”