By Staff Reporter
PUBLIC Service Minister Sekai Nzenza says government has allowed the National Social Security Scheme (NSSA) to invest US$20 million offshore in attempts to preserve the value of pension contributions from further depreciation while in the form of the fast depreciating value of the local currency.
She had been asked during parliament’s question and answer session on what measures government had in place to protect pension contributions from being eroded by inflation because of uncertainties surrounding bond notes.
“…NSSA’s policy is to invest more in real assets, which preserve value,” said the Minister, adding, “These include properties, listed and unlisted equities.
“Of late, NSSA has been allowed to invest offshore in United States dollars of which it has invested $20 million with Afreximbank.
“Its money market investments are restricted to short term to cover immediate needs, which include pension payouts and administration expenses.
“Real assets at $1.1 billion constitute 69% of NSSA’s total investments. $243 million (16%) of NSSA’s assets are in Treasury bills, which earn an average interest rate of 6.25% with maturities ranging from 3 to 10 years.
“NSSA’s total investment assets amount to $1.6 billion.”
The continued fall of the local surrogate currency in which salaries and pensions are pegged has caused continuous distress within the country’s working population.
Zimbabwean teachers said last month that their salaries have shrunk to just $75 for the lowest paid educator following the fall of RTGS bank balances if converted to the more stable US dollar.
Government has resisted continued demands by its workforce to pay salaries in US dollars.
Thousands of Zimbabwean workers lost their pensions during the 2008 hyper inflationary period.
In attempts to remedy the crisis, government appointed a Commission of Inquiry into the conversion of insurance and pension values from the Zimbabwe dollar to the United States dollar.
The commission recommended that pensioners and insured persons should be compensated for the lost values based on an appropriate conversion rate.
However, the report did not state the appropriate rate to be applied on compensating the affected persons.
The Insurance and Pensions Commission (IPEC) was assigned to come up with appropriate conversion rate and is still working on it.
Affected people will be compensated as soon as the appropriate conversion rate is stipulated, said the Minister.
“Short term benefits (once off payments) beneficiaries who received $25 retirement and $10 survivors’ grants respectively are currently being compensated based on Statutory Instrument 60 of 2011,” Nzenza said.
“Statutory Instrument 60 of 2011 stipulates US$150 as insurable earnings for all Zimbabwe dollar contributions, a figure that was not available in 2009 at cross over to multi-currency.
“In that respect, the payouts are being adjusted based on one’s actual contribution period. These beneficiaries are currently receiving their adjusted payouts from NSSA.”