THE Insurance and Pensions Commission (Ipec) will before the end of the year conclude modalities to start compensating early next year, policyholders and pensioners for the loss of value suffered prior to 2009.

In 2015, former President Mugabe set up a Commission of Inquiry led by Retired judge Justice George Smith to probe the conversion process used in converting pensions and insurance benefits following the dollarisation of the economy.

Following recommendations by the Commission of Inquiry, Ipec has established a working group to facilitate the closure on compensation of the policyholders and pensioners for the loss of value suffered due to hyper-inflation in 2007 and 2008 and the country’s adoption of multi-currency system in 2009.

Responding to questions during the 2021 Ipec and National Social Security Authority Journalists Mentorship Programme launched virtually on Wednesday, Ipec director for actuarial services Mr Robson Mtangadura said: “At high level we have come up with the implementation roadmap with clear milestones in terms of activities that need to be done and the timelines.

“If all goes according to plan, we expect to come to conclusion by the end of this year and hopefully that will see some compensation trickling through early next year.”

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.

“In terms of major activities, the main hurdle was for us to dissect the Justice Smith Report and then try to come up with standard approach across all insurance companies and Pension funds.

“As you are aware that insurance products are unique and they are different per each insurance company, for us to then come up with a standard approach in terms of how to implement that compensation framework, took a bit of time,” said Mr Mtangadura.

Responding to questions at the same occasion regarding the losses under the 2019 currency reforms, Ipec director for pensions Mr Cuthbert Munjoma, said a guidance paper of currency reforms has been issued.

“Basically that guidance paper is to ensure that pension scheme members benefit from assets that were matching their liabilities prior to currency conversion.

“So, we have successfully implemented that guidance paper and there has been an equitable allocation of assets prior and post conversion in 2019.

“This has resulted in some pension increases and bonus increases, among other things,” he said.

With respect to writing of business in foreign currency, Mr Munjoma said Government has issued a gazetted circular and this is Statutory Instrument 28 of 2020, which allows pension funds to receive contributions in forex as well as paying out benefits in hard currency.

“So, there are employers that are paying salaries in foreign currency and as we all appreciate, pension contracts arise from contracts of employment and normally as a percentage of your salary,” he said.

In the Mid-Term Budget Review Statement presented last week, Finance and Economic Development Minister Professor Mthuli Ncube highlighted that Ipec was seized with bringing closure to the pre-2009 compensation.

“A roadmap for the envisaged milestones and timelines for compensation will be published for the benefit of policyholders and pensioners and compensation modalities will be concluded before the end of this year,” he said. — @okazunga