THE Insurance and Pensions Commission (Ipec) has introduced a framework to regulate fees charged by pension funds, in a move aimed at protecting members from excessive costs and ensuring better value.
Ipec director of pensions and life insurance supervision Cuthbert Munjoma told the Zimbabwe Independent that the framework would also help ensure that members receive adequate services from industry players.
“Regulators pushed for ‘value for money’ — this is a new concept recently adopted by regulators of pension funds globally,” he said.
“It examines the value being created by different service providers of pension funds, such as asset managers, pension fund administrators, transfer secretaries, custodians, auditors, and actuaries, and assesses whether their fees for services rendered are not resulting in erosion of value for pension scheme members.
“The cost of the service being offered should be outweighed by the benefits arising from such services.”
“It is in this context that Ipec issued an expense framework, which imposed expense caps on fees that are levied on pension funds by different service providers such as pension fund administrators and asset managers. Such measures are aimed at improving consumer protection,” he said.
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The commission is also enforcing provisions of the updated Pension and Provident Funds Act to strengthen consumer safeguards.
Munjoma said the law requires pension funds to hold annual general meetings, issue benefit statements, improve governance, enhance investment performance and increase transparency.
Speaking at the Insurance and Pensions Symposium in Victoria Falls recently, deputy commissioner of South Africa’s Financial Sector Conduct Authority Astrid Ludin challenged traditional approaches to regulation, arguing that affordability alone was insufficient.
“Value for money is not simply about cost efficiency. It is about whether retirement fund members receive fair outcomes relative to the fees they pay, the risks they bear, and the services they receive,” she said.
She outlined emerging global practices where pension funds are assessed not only on cost, but also on investment performance, service quality and product suitability. Ludin emphasised that transparency and enforcement were critical, warning that “a value for money framework has no impact without enforcement.”
Ghana’s commissioner at the National Insurance Commission, Abiba Zakariah, highlighted the balance regulators must strike between encouraging innovation and protecting consumers, stressing that innovation should be guided by trust and ethics. She also underscored the importance of regulatory innovation, pointing to tools such as sandboxes, risk-based supervision and digital regulatory technologies as mechanisms to “enable creativity without compromising protection.”