Pensioners to wait longer for pre-2009 value loss compensation

17 Mar, 2024 - 00:03 0 Views
0 Comments
Pensioners to wait longer for pre-2009 value loss compensation Enacy Mapakame Government says it is looking into the plight of pensioners and people living in rural areas to ensure they have access to cash during the festive season. Demand for cash during the festive season usually rises as spending by holidaymakers increases driven by the need to cater for travel expenses, festivities as well as gifts and presents. The country has been experiencing cash shortages since early last year, giving rise to the use of plastic money and mobile money transactions. However, most pensioners and the rural communities have limited access to Point of Sale machines and other digital platforms, thereby remaining the most affected. Reserve Bank of Zimbabwe (RBZ) director (economic research) Mr Simon Nyarota said the apex bank has already injected more money into banks to enhance cash accessibility by depositors. “This time of the year the central bank always puts more cash into the banks to alleviate cash shortages throughout the banking system,” he said in an interview at a currency dialogue organised by Econometer Global Capital, which was held in Harare last week. “We know banks like POSB (People’s Own Savings Bank) and others deal mostly with pensioners, but even the other banks, they have something for the pensioners too. “Every year we import more money and inject into banks to alleviate shortages,” said Mr Nyarota. Mr Nyarota, however, did not provide the specific amount of funds the central bank has injected into the system. Finance and Economic Planning Deputy Minister Terence Mukupe said Government is cognisant of the cash shortages and their effects, especially for the rural folk whose transactions are mainly cash based. Of late, pensioners have been sleeping on street pavements as they queue for cash from local banks, a situation Mr Mukupe said is deplorable and needs to be addressed with haste. In light of this, he said Government would work on a deliberate policy - beyond holiday seasons - to enable pensioners to access cash from banks hassle free. “The issue of pensioners accessing cash has been brought to us, we will probably come up with some deliberate policy for them. We know most of them are not able to use POS as well as those in rural areas. “If we are going to come up with a policy intervention, it has to be sustainable. At the moment all we can do now is encourage banks to help them. We need to be careful about it because if we just say give them money, all of a sudden their accounts will start to balloon and everyone will be looking for an old person to take to the bank,” said Mr Mukupe. Finance and Economic Planning Minister Patrick Chinamasa said the prevailing cash shortages would not disappear overnight and urged people to be patient as Government implements measures to address the shortage of banknotes.

The Sunday Mail

Tawanda Musarurwa

PENSIONERS whose savings lost value around 2009 will have to wait a bit longer to start receiving compensation because all players in the pensions and insurance industry failed to provide acceptable compensation schemes.

According to compensation timelines outlined in Statutory Instrument (SI) 162 of 2023 (Compensation for Loss of Pre-2009 Value of Pension Benefits Regulations) promulgated last September, compensation was expected to begin this month. Last week, the Insurance and Pensions Commission (IPEC) said none of the submitted compensation plans met the set requirements.

“None of the 1 249 assessed compensation schemes were approved due to non-compliance with the provisions of Statutory Instrument 162 of 2023. As a result, the actual payments, which were initially scheduled to commence in March 2024, will not be possible,” said IPEC.

At least 1 395 submissions were expected in total. The sector regulator said some of the assessed 1 249 compensation schemes were “close to fully complying with the compensation regulations”, and payments would start once the schemes met the requirements.

The balance of 146 schemes either did not submit at all or submitted incomplete plans.

According to SI 162 of 2023, if IPEC rejects a compensation scheme, the fund or insurer concerned shall resubmit a revised compensation scheme within 14 days of being notified by the commission of the rejection.

During the hyperinflationary period between 2007 and 2009, the value of most savings (including insurance and pensions policies) was eroded.

The Justice Smith Commission of Inquiry, which was appointed in 2015 to probe the conversion process, blamed the value erosion largely on poor regulatory enforcement and demonetisation of the local currency.

The commission concluded that “there was a huge loss of value to insurance policyholders and pensioners owing to failure by Government, the Insurance and Pensions Commission and the industry to set up a fair and equitable process of converting insurance and pension values from Zimbabwe dollars to US dollars”.

Related Stories:

In terms of calculating the compensation amounts, the schemes are expected to add up the United States dollar sums for each year of a member’s contribution, and then adjust at the appropriate interest rate based on the fund’s experience, subject to a minimum annual rate of 3 percent compound interest up to February 28, 2009.

Independent actuary Mr David Mureriwa has estimated compensation for pensioners to be around US$900 million.

“If we are to compensate using the proposed 3 percent in the regulations, then there is something for the members, because it’s higher than what the economy fell by (in US dollar terms),” he said “And, if we use the 3 percent indicated by the regulator, we expect a compensation of just below US$1 billion.”

On its part, in July 2022, the Government committed US$175 million to compensate pensioners and insurance policyholders for value that was lost during the changeover from the Zimbabwe dollar to the multi-currency system in 2009.

 

 

 

Share This:

More Stories:

Classifieds Electronics Cars & Parts Building Supplies Services Property, Houses Home & Garden Leisure & Travel Commercial Supplies Fashion & Beauty Jobs   Online Payments Airtime & Bills Prepaid Electricity City of Harare NetOne OneFusion Pay TelOne ADSL Web Development Domain Registration Email Hosting Web Hosting    
Classifieds Electronics Cars & Parts Building Supplies Services Property, Houses Online Payments Airtime & Bills Prepaid Electricity Web Development Domain Registration Web Hosting

Survey

We value your opinion! Take a moment to complete our survey

Take Survey

This will close in 20 seconds