HomeLocal NewsIpec set to compensate policy holders for 2008-2009 losses

Ipec set to compensate policy holders for 2008-2009 losses

BY MTHANDAZO NYONI

THE Insurance and Pensions Commission (Ipec) expects to start compensating insurance and pension losses suffered prior to 2009 early next year as the framework for that purpose is almost complete.

A commission of inquiry, led by Retired judge Justice George Smith, was set up in 2015 to probe the process used in converting pensions and insurance benefits following the dollarisation of the economy.

Following recommendations by the commission of inquiry, Ipec established a working group to facilitate the closure on compensation of policy holders and pensioners for the loss of value suffered due to hyperinflation in 2007 and 2008 and the country’s adoption of a multi-currency system in 2009.

The commission of inquiry was set up on the back of widespread concerns by pensioners that their pensions and insurance benefits were undervalued during the changeover from the Zimbabwe dollar to the multi-currency system.

Responding to questions during the insurance and pensions journalists mentorship programme held virtually yesterday, Ipec manager for pensions Tariro Mapfumo said they were in the final stages of their implementation roadmap.

“As for the 2009 compensation, we acknowledge that this has taken quite a bit of time but we are happy to announce that we are in the final stages of our implementation roadmap. We foresee that, all things being equal, we will be able to start rolling out the compensation early next year,” she said.

On the 2019 compensation framework, Mapfumo said: “We wish to advise that the government set aside compensation in the form of an asset which are shares in Kuvimba and a dividend of US$400 000 has since been declared.”

“So as Ipec, we are setting up the appropriate framework to ensure that we implement the proposed compensation framework. This is due to the fact that quite a number of pensioners are supposed to benefit from those assets and that dividend declaration, so we are in the process of finding the best way of ensuring that we parcel out that dividend in a manner that impacts positively on the lives of our pensioners,” she said.

Ipec public relations manager Lloyd Gumbo added: “To add on the 2019 currency reforms, you may be aware that conversion was 1:1, but as the regulator for the insurance and pensions industry, we issued a guidance paper to the industry requiring them to revalue both the assets and liabilities. As a result, implementation has been happening since last year.

“We issued the guidance paper early last year in March and implementation has been going on in terms of complying with the requirement to revalue both the assets and the benefits that members are entitled to. So we have some pension funds who have already implemented while some are in the process of implementing or complying with the requirements of that guidance paper.”

“So you will find that it’s not necessarily to say they lost out everything because that guidance paper helped to reduce the impact of the loss of value that would have visited the pension scheme members if we had not issued that guidance paper. So the guidance paper goes a long way in making sure that pension scheme members get what is rightfully theirs as the assets are revalued.”

In his mid-term budget review statement, Finance minister Mthuli Ncube said a roadmap for the envisaged milestones and timelines for compensation would be published for the benefit of policy holders and pensioners and compensation modalities would be concluded before the end of this year.

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