HomeBusiness DigestChinamasa warns Psmas over salaries

Chinamasa warns Psmas over salaries

FINANCE minister Patrick Chinamasa yesterday said government was concerned with the continued “lavish remuneration” of senior management at Premier Service Medical Aid Society (Psmas) and Premier Services Medical Investments (PSMI) at a time when the companies are struggling.

Elias Mambo

This comes against the backdrop of reports that Psmas managing director Henry Mandishona, appointed to his current position in May, is earning a staggering US$40 000 per month, almost four times the US$11 000 he should be getting under the new remuneration structure, while the company is struggling to pay service providers and workers.

Presenting the mid-term fiscal policy review statement in parliament yesterday Chinamasa said: “I must raise concern with regards to continued reports of lavish remuneration by the senior management (of Psmas).”

He warned audits were underway at the health insurance provider, and said Treasury had called for corrective measures in line with the remuneration framework for parastatals approved by cabinet.

At its sixth meeting on March 4 2014, cabinet approved a set of measures to ensure transparency and efficiency by, among other things, ensuring that parastatals, state enterprises and local authorities stick to good corporate governance tenants.

Cabinet set the cap for parastatal chief executive officers at
US$6 000. It said remuneration would also be based on the company’s capacity to pay while the prevailing economic conditions should also be considered.

Chinamasa said “contributions to the premier service medical aid society (Psmas) were part of employment costs, for which US$61,65 million was disbursed during the first half of 2015”.

“This should improve the capacity of the society to meet its obligations to service providers and, hence, improve accessibility of services by Psmas members,” he added.

Government owed Psmas US$71 million before paying US$61,65 million, although US$20,5 million in arrears is outstanding.

However, he said what has been going on at Psmas is contrary to the organisation’s parameters of operations.

“The Psmas board already requires that its management operates within the parameters of the cabinet approved rationalised remuneration framework. The necessary audits to verify this are being instituted,” he said.

Last week the Zimbabwe Independent reported that Mandishona, who effectively took over from former Psmas CEO Cuthbert Dube whose position was abolished, is reportedly earning about
US$40 000 as a salary and perks from the group.

This is despite the fact that Psmas executives are now supposed to earn between US$9 000 and US$11 000 as monthly salaries.

Insiders say the average benefits for executives which stood at US$10 000 had been slashed to about US$1 000. This has left top company executives fuming, while some senior employees were reportedly resisting the changes despite the fact the company is struggling.

Sources told the Independent Psmas had in recent months seen a large pullout by companies which provided membership to the health insurer, further crippling the cash-strapped health service provider’s operations.

The company has gone for three months without paying employees’ salaries. Psmas blames part of its problems on government’s failure to remit civil servants’ contributions.

The public service constitute the majority of over 800 000 members of the health insurer, which has branches across the country and the region.

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