THE compensation of pensioners for the loss of value incurred during the 2019 currency reforms has been hampered by the failure by pension funds to provide adequate details of the beneficiaries, a senior government official has revealed.
Government availed shareholding worth US$75 million in Kuvimba Mining House to augment pension benefits following the 2019 currency reforms and early this year, pensioners started receiving US$100 payouts as dividends from the investment.
Kuvimba’s portfolio includes Freda Rebecca Gold Mine, Bindura Nickel Corporation, Shamva Gold Mine, Jena Mine, Elvington Mine, Sandawana, Homestake, ZimAlloys, and an investment in Great Dyke Investments.
The Insurance and Pension Commission (Ipec) holds a 5% stake in Kuvimba Mining House, and proceeds from that investment have been earmarked for compensation in respect of legacy pensions.
Government is also seized with the compensation of those pensioners for the loss of value incurred due to the 2008 hyperinflation which led to the demonetisation of the Zimbabwe dollar.
Addressing delegates at the Zimbabwe Association of Pensions Funds annual conference in Victoria Falls on Friday, Finance ministry chief director communications and advocacy, Clive Mphambela said the industry should come up with effective ICT solutions to enable them to address the challenge of lack of vital data on pensioners.
“You will recall that government availed shareholding worth US$75 million in Kuvimba Mining House to augment pension benefits following the 2019 currency reforms. The updates we have been receiving from Ipec have been that the amount is yet to be fully disbursed owing to data challenge,” he said.
“We reiterate the regulator’s call to address data integrity. Key considerations should include holistic business process re-engineering, exploring the feasibility of ICT infrastructure sharing to save on thousands of US dollars being paid outside the country as annual licence and maintenance fees and leveraging local capacity in the ICT sector to develop home-grown solutions. Our preference as government is for the latter.”
Mphambela added that government acknowledged the need to bring closure to the emotive issue of the 2009 compensation.
He said the restoration of confidence in that industry was hinged on finalisation of this process.
“I understand there were extensive consultations on the compensation framework for 2009, covering issues such as determination of prejudice and sources of funding, among others.
“The ministry is actively considering the submissions and guidance will be given in due course. Meanwhile, pension funds administrators should put in place mechanisms to facilitate compensation, including the required data,” he said
Meanwhile, Mphambela said engagements were underway with shareholders of the affected companies in relation to the suspension of trading of Old Mutual and PPC shares on the Zimbabwe Stock Exchange (ZSE).
The shares of the two companies were suspended from trading in June 2020 together with those for Seed Co International after it was alleged they fuelled runaway inflation through exchange rate manipulation on the parallel
“My address will not be complete if I do not acknowledge the challenges being faced by the industry due to the continued suspension of trade in Old Mutual and PPC shares on ZSE,” he said.
“Engagements are underway with shareholders of the affected companies to find a lasting solution and I must say significant progress is being made.”