Zimbabwe’s pension industry consists of four pension schemes, namely the National Social Security Authority (NSSA), Civil Service Pension, Private Occupational Pension and Individual Pension.

THE Insurance and Pensions Commission (IPEC) says the average pensioner in Zimbabwe receives a pension well below the poverty line.
Speaking at a seminar held by the Institute of Chartered Accountants of Zimbabwe in collaboration with IPEC on Tuesday, the commission’s pension department head, Josphat Kakwere said in 2017 pensioners received payouts that fell well below the poverty datum line.
“How much is enough for a pensioner to survive or live on?…with the food basket for a family of six members and total Poverty Datum Line ranging between $500 and $575 for the year ended 31 December 2017, the obvious answer is: No. The average monthly pension benefits accounts for 28,40 percent to 24,70 percent of the monthly bread basket range for the year 2017,” Kakwere said.
In 2017, pensioners receiving monthly benefits were paid a total of $76,62 million which represented 34,22 percent of total benefits, this figure translates to an average monthly pension benefit of $142 per pensioner. Total pension benefits for the year ended December 31 amounted to $223,94 million. The benefits were paid in the form of lump sum payments and annuities.
Kakwere said benefits were low because of low salaries and contribution rates.
“The old adage: ‘What you put in is what you get out’ is very true when it comes to pensions benefits,” he said and further cited low investment returns, high expense ratios as well as contribution arrears as other causes of low benefits. He said contribution arrears amounted to $600,31 million as at December 31, 2017, this represents almost 15 percent of total assets on that date at a $ 4,03 billion.
Kakwere said the prevailing situation could be remedied by higher contribution rates and higher investment returns. He also suggested inflation indexed investment, hybrid schemes, and consolidation of pension funds as other possible remedies.
Meanwhile, the MDC Alliance has proposed to restructure government pensions, to move away from a defined benefit scheme to a defined contribution scheme. The country’s main opposition party believes that this will “create a huge vessel of savings in the economy which will ultimately provide better benefits to its members”. The party proposed this in its manifesto which was launched a fortnight ago. The party, in the manifesto which has received mixed reviews, also proposed other pensions reforms including the restructuring of the National Social Security Scheme.