Martin Tarusenga Over the years, Zimbabwe Pensions and Insurance Trust (ZimPIRT) has interacted with various counterparties or other stakeholders to pension and insurance policy arrangements on behalf of pensioners, pension fund members and insurance policyholders. These counterparties/stakeholders include Insurance and Pensions Commission (Ipec), government as represented by the Finance ministry, parliament and insurance companies and pension funds administration.
These latter parties’ apparent or stated positions on honouring pensioner and policyholder full rights have not been transparent nor explicit, if at all. Government institutions would not act on pensioners’ appeals against insurance companies and pension fund administrators, while investigations and Commission of Inquiries instituted were meddled with, being rendered ineffective.
Pensioner decisions to go to court and progress on pensioner litigation to date, on the back of the parties’ apparent undeclared and stated positions have been delayed by very long turnarounds in the courts, reservation of judgments, and court arguments on technicalities outside the core issues of the pensioners rights as provided for in the legislation.
Overall, pensioners consider the court procedures to be replete with inefficiency, and in the circumstances susceptible to corruption.
It has categorically been established how insurance companies, pension/insurance fund administrators and underwriters mismanaged pension and insurance funds and how they are ducking responsibility and accountability.
The Justice Smith Commission of Inquiry report bears witness to this, for instance. Apart from failure in benefit calculations, gross mismanagement of pension funds has been established in accounting, solvency management, investment management, data management, pension fund governance (and regulation), as pensioners pursue the matter.
The discoveries of gross mismanagement by the public prompted insurance companies to cover up their failures and incompetence by using institutional financial power to bribe, capture and mislead authorities such as the regulator, government (as represented by the relevant ministries) and also parliament.
It is apparent that the insurance companies and pension administrators have sought exclusive access to the Finance ministry and hence the regulator Ipec, while key counterparties to pension and insurance arrangements, herein the key stakeholders are evidently being given leap service, to all intents and purposes being denied meaningful access to these institutions overseeing pension and insurance service provision in Zimbabwe.
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Pensioners, pension fund members and insurance policyholders are here considered key stakeholders to pension and insurance arrangements having contributed for many years and therefore being the quintessential owners of pension and insurance funds. Using this exclusionary strategy, the Finance Minister has over the years, breached good governance principles and practices (among other things) in the following ways:
By unilaterally appointing a regulatory board (Ipec board) that is wholly conflicted to the interests of the key stakeholders (i.e. pensioners, pension fund members and insurance policyholders) in the process ensuring that only the interests of insurance companies and pension fund administrators are entertained.
By excluding the key stakeholders in the rolling out of pension and insurance legislation i.e. the Pension and Provident Funds Bill, the Insurance Act and the Ipec Act, in so doing brazenly providing for the mismanagement of pension and insurance funds in the legislation, thereby unjustly prejudicing pension funds
By taking full advantage of an unsuspecting parliament
The unsuspecting parliament in turn, has not taken time to establish the concerns of pensioners, pension fund members and policyholders as key stakeholders in debating pension and insurance legislation.
It is apparent that parliament has ignored representations from the pensioners as key stakeholders, at the apparent behest of insurance companies, Ipec and Finance minister, in caucus meetings that exclude pensioners.
The Pensions and Provident Funds Bill was thus passed in the National Assembly and the Senate in 2021 and 2022, respectively. This Bill, in particular, provided for wrong formulae that yielded very small inconsistent benefits (if at all). In the process these Bill provisions introduced the following irregularities:
breach current provisions of the Pension and Provident Funds Act as read together with pension Fund Rule Books,
attempt to legalise formulae that were condemned by the Justice Smith Commission of Inquiry, and by court judgments
entrench actuaries as the sole determinants of this wrong formulae, without question on the rationality and correctness of the methods. In this regard it is apparent that these provisions are a bid for the three or four actuaries practising in Zimbabwe to avoid accountability, and to (anti-competitively) maintain monopoly on advice to pension funds and insurance businesses. These actuaries work for insurance companies, providing advice to the pension funds, and incompetently misled an equally ignorant and incompetent management of pension and insurance service providers into using the condemned formulae.
The Bill further provided for minimum benefits for the same reasons, as above.
There were many other flaws with the Bill which breach international principles and practices on pension legislation, and hence regulations thereof.
The Insurance Bill and Ipec Bill has been sneaked into the National Assembly despite pensioner representation that the Bills were done without pensioner involvement, and callously written to exclude equitable representation of pensioners, pension fund members and policyholders as key stakeholders.
Some members of the National Assembly have fortunately objected to the Ipec Bill. Serious lobbying and advocacy work needs to be done to repeal the fundamentally flawed Pension and Provident Funds Bill, and to stop the other Bills.
With regards to the involvement of Parliament in the honouring of rights from pension and insurance schemes, the state of pension and insurance legislation in Zimbabwe as the foundation of the schemes’ successful management of the schemes and any successful litigation, parliament has not shown any involvement and initiative in the writing of the Bills set before it, (exclusively) by Ipec and Finance ministry, neither has it shown any transparency and fairness in deliberating and passing the Bills, on an informed basis.
Parliament has also become an instrument of manipulating pension and insurance legislation against pensioners, and for protection of incompetent insurance companies, pension administrators and the three or so actuaries practising in Zimbabwe.
It is now incumbent that pensioners, pension fund members and policyholders actively engage in serious lobbying, advocacy and litigation to stop the corrupted value chain in the delivery of full rights from pension and insurance arrangements.
The lobbying and advocacy should be aimed at engaging parliament and the government in a way to counter the exclusionary caucus meetings between these institutions on the one hand, and insurance companies and pension fund administrators on the other, from which it is apparent decisions are made to pass fundamentally flawed pension and insurance legislation. It is the only way to save over US$20 billion saved by about two million pensioners, pension fund members and policyholders over many years (averaging 25 years per member).
Tarusenga is Zimbabwe Pensions and Insurance Rights Trust general manager. Opinions expressed herein are those of the author and do not represent those of the organisations that the author represent.