AFTER a long and uncertain wait, pensioners and insurance policyholders who were heavily prejudiced during the conversion of their benefits at dollarisation in 2009 could soon have smiles on their faces, as the Insurance and Pensions Commission (IPEC) has directed insurers and pension funds to start computations of the losses. Nearly a decade after the Government commissioned an investigation in 2015 into how pensions and insurance benefits were paid out following a big outcry from pensioners and policyholders, IPEC said protocols of gazetting the compensation regulations were at an advanced stage, signalling the imminent start of the process. Pension fund values were eroded due to hyperinflation. The Government wiped out the hyperinflation figures in 2009, when it abandoned the use of the Zimbabwe dollar for a basket of foreign currencies, but mostly dominated by the US dollar, leading to what is now generally called dollarisation. The commission of inquiry, chaired by retired Justice George Smith, confirmed a “huge” loss of value to policyholders and pensioners and recommended compensation for the loss suffered. Thousands of insurance policyholders and pensioners have been hoping for additional payouts after receiving insignificant amounts as low as US$0,08 after several years of working. Some of them got zero values owing to lack of benefit inflation-indexation and currency de-basing. The loss of value has left many people, after years of hard work, poor and have been expecting compensation. IPEC said significant progress has been made and compensation regulations would be gazetted soon. “To ease the pressure of work associated with implementing the regulations once gazetted, insurers and pension funds are urged to start preparation and computations based on the draft regulation,” IPEC said in a circular to stakeholders. “This will aid the smooth implementation process and adherence to timelines proposed in the draft.”
Analysts say compensating the policyholders and pensioners would bring a huge relief to thousands who were short-changed. camwhore bella.luna “Some have already died but we still have some and compensation would be a great thing for them,” an asset manager with a Harare-based firm said. “Hopefully, the compensation would be something reasonable.”
While the total prejudice suffered would not be quantified, the commission was satisfied the industry had “reasonable capacity” to compensate thousands of policyholders. The compensation framework would take into consideration the criteria for assessing prejudice in relation to the insurance and pension contracts, the factors that caused loss of value, the shortcomings of the conversion and soundness of the industry.The commission noted the loss
that resulted from inflation, currency de-basing and exchange rate used for de-monetisation contributed 43 percent of the loss, regulatory flaws 21 percent, while poor industry practices contributed 36 percent.
The Government is also in the process of compensating pensioners for losses incurred during the 2019 currency reforms. Finance and Economic Development Minister Prof Mthuli Ncube said following a dividend declaration by Kuvimba Mining House in 2021, a total of 3 547 pensioners from the first group of vulnerable pensioners have been paid US$100 each, translating to a disbursement of US$354 700, out of the US$400 000 allocated as at September 30, 2022.
The first dividend tranche targeted pensioners and beneficiaries earning an annual pension of below $1 000 as at December 31, 2020 and subsequent disbursements will be made once more resources are available, Prof Ncube added. – Sunday Mail
