80 percent of Zimbabweans to be condemned to poverty on retirement, experts warn

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THE Zimbabwe Association of Pension Funds (ZAPF) have been accused of fuelling poverty by failing to remit contributions.

Discussions at the just ended ZAPF 43rd annual congress in Victoria Falls resonated on contributions that were lost in pension funds due to the 2009 conversion to United States dollar as well as corruption by companies.

Thousands of citizens lost thousands in various pension funds due to hyperinflation which resulted in the country adopting the multi-currency system.

Josphat Kakwere, who is head of the pensions department at the Insurance and Pensions Commission (Ipec), said 80 percent of Zimbabweans will be condemned to poverty upon retirement.

“As we seek to reposition the industry, let’s avoid the current scenario where old age has been transformed to old poverty. Pension should be sustainable, affordable and relevant,” he said.

He said Ipec was in the process of reviewing its regulations to compel companies to remit pension.

“There are about 1.23 million active contributors under the National Social Security Authority and about 80 percent of the working class when they get to retirement they will be condemned to old age poverty because of lack of remitting by companies, and corruption,” he said.

Local Government Minister July Moyo who was guest of honour said pension funds play a key role by allocating pensioners contributions into securities, real estate, hedge funds, bonds, stocks, equities and other alternatives hence the industry should be revived.

He said government was aware of what has been happening in pension funds industry which has caused high levels of poverty and low level of confidence.

“The conversion to United States dollar had eroded people monies and government decided to set up a commission of inquiry to look into the subject of their lost value.

“I challenge ZAPF to look into current and future innovations pertaining to pensions administration and as you debate on strategies to revitalise the pensions industry, I encourage you to create a social security scheme for our brothers and sisters abroad and government will give necessary support through ministries,” said Moyo.

He called for good co-operate governance saying pension funds have a critical role to ensure that pension contributors are managed for the benefit of members.

Moyo called for a paradigm shift in management of pension funds so as to contribute to the economy and provide adequate retirement income.

The theme of the congress which ended Saturday was: “Changing the present, Protecting the future.”