Pensioners get part payment in USD

Staff Writer

GOVERNMENT pensioners will effective this month get part of their earnings in United States dollars as a cushioning measure by government against inflationary pressures.

As the economy is officially in hyperinflation, savings and value have been lost, resulting in pensioners monthly payouts being wiped off.

“Pensioners will be getting US$30 while civil

Insurance companies should accumulate inflation linked product to preserve value: Mangudya 

Harare – RBZ governor, Dr John Mangudya said the central bank will provide insurance companies a product that is inflation linked in a bid to preserve value for them and the pensioners, although analysts are skeptical about the prospects of such a product which presently does not future among the possible

New registration fees for pension funds, as fund administrator rules are amended

Own writer

HARARE – The ministry of Finance has gazetted a new Statutory Instrument (SI) 91 of 2020 that deals with fund administrators, principal officers, registration fees as well as financial results of pension funds.

For a person to be a fund administrator according to SI 91 of 2020, one has to be an insurer

Preliminary Impact on the Insurance and Pensions Industry

• Vice President, whilst it may be too early to assess the full impact of COVID 19 on the insurance and pensions industry, preliminary indications have pointed to the following:-

1. Huge reduction in investment income from real estate – as you may be aware, the insurance and pensions industry controls about 80% of commercial real estate in most urban and peri-urban centres. To date, 70% of the industry’s assets are invested in real estate. Given the closure of businesses during the lockdown and its impact on business, the industry is anticipating a serious reduction in investment income as tenants fail to pay rentals on account of business closure. We have already had submissions from some of the pensions fund citing the impact on rentals and calling for pensioners to be treated as a vulnerable group eligible for support;
2. The pandemic has also affected the labour market, which has a bearing on pension contributions in the short-to-medium term. As such, inflows to pension funds in the form of pension contributions will be adversely affected by the pandemic;
3. Slowdown in infrastructure development and other projects of national importance due to reduced incomes as the industry is a key strategic investor in such projects;
4. Pensioners are directly and indirectly affected as the pandemic is negatively affecting investment return. The situation has been exacerbated by inflation developments, as the year-on-year inflation for March 2020 stood at 676%.
5. Some reduced revenues as policyholders reduce covers as a response to the reduced economic activity during the lockdown period; and
6. At the same time the sector is still weighing the possibility of claims from policyholders with business interruption policies.
7. Having said this, Hon VP , the pandemic has exposed gaps in cover as the indications are that most business operators did not have cover for business interruption covering pandemics. This will be a learning point for the industry, and business operators and I am sure that based on this experience, there will be efforts to make such cover available in the future.

Measures by IPEC

• The Commission worked with the industry