Commission to probe demonetisation of Zim dollar pensions

President Robert Mugabe has appointed Retired Justice George Smith to chair a commission of inquiry into the conversion of pensions and insurance benefits to the United States dollar from the defunct Zimbabwean dollar.

BY BUSINESS REPORTER

The move is set to bring closure to the matter which has been pending since Zimbabwe embraced the multi-currency regime in 2009.

It also dovetails with the decommissioning of the Zimbabwean dollar from the formal system. The process to retire the local unit runs up to September. It began on June 15.

In a Statutory Instrument published in a Government Gazette last week, Mugabe said the commission’s tenure runs for nine months. Other members of the commission are chartered accountant Anesu Daka, insurance guru George Dikinya, actuary Tapiwa Maswera, economist Godfrey Kanyenze, Violet Mutandwa, Martin Tarusenga, Itai Chirume and Brains Muchemwa.

The commission is tasked with establishing fully the total value of pensions, as at March 31 2006 and as at March 31 2009.

The commission will investigate the processes, methods and criteria used for converting values from Zimbabwean dollars to United States dollars. It will establish the factors, causes and reasons for the loss of value of pensions as of March 31 2009.
The commission will give a breakdown of “those causes, reasons, factors and to provide a weighting of the same in terms of their individual contribution to the loss of the pension values”.

It will also investigate the role of pension funds and pension fund managers during the conversion period.

The commission of inquiry will identify appropriate criteria for assessing whether any pension fund members or insurance policy holders have been prejudiced, and based on these, to establish the extent of prejudice, if any, to pension fund members and insurance policyholders. Where members have been prejudiced, the commission of inquiry will establish an appropriate basis for compensating such pension fund members or insurance policyholders.

It will investigate the financial soundness of the Zimbabwean insurance and pension industry before, during and after the conversion to US$ from the Zimdollar. If there are causes of financial unsoundness, the commission has to establish how the country can restore the financial soundness of the insurance and pensions industry.

The commission will investigate all instances of failure of regulation, governance, legislation and oversight in the running of insurance and pension funds, regulation and monitoring of the pension industry and make recommendations on how to deal with these issues.

It will also investigate the “relationship between the insurance and pension industry and the rest of the financial services sector as well as the economy as a whole before, during and after conversion and benchmark it with international best practice in order to make recommendations on the role of the insurance and pension industry in the economy of Zimbabwe”.