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Business Reporter
THERE is a need for an increase in monthly pension payouts to cushion beneficiaries from inflationary pressures that erode the value of payouts, the Insurance and Pensions Commission (Ipec) has said.

Pensions

In view of the plight of pensioners, particularly the urgent need to cushion them, the Commission says an upward review of the minimum pension in the determination of the qualifying criteria for commutation and preservation purposes was ideal.

The Commission also seeks to promote the welfare of pensioners to take into account the current macro-economic environment.

According to the recently issued 2021 report, Ipec said although the industry monthly pension average of $5 235,14 was above the minimum pension of ZW$3 000, which is applied in the determination of commutation of preserved amounts as per Circular 25 of 2021, the value is low.

“While the monthly average is above the minimum pension, the values are still relatively low when considering inflation, hence the minimum pension needs to be revised,” said the regulator.

“The low monthly pension average is a reflection of low or infrequent pension increases being awarded to cushion pensioners from inflationary pressures.

“The Commission seeks to protect member interests by ensuring that pension values remain meaningful by upward reviews of minimum pensions and approval of pension increases, where feasible, especially in the face of inflationary pressures.”

The report notes a decline in members with unclaimed benefits from 158,863 as at 31 December 2020 to 151 253 as at 31 December 2021.

It attributed the decline to awareness efforts it has been conducting and also industry various platforms calling members to claim their benefits, which are due.

“Pensioners receiving benefits, excluding beneficiaries, increased from 33 208 as at 31 December 2020 to 35 569 as at 31 December 2021.

Suspended pensioners, those who failed to submit life certificates and claims of their pension benefits, slightly decreased from 12 773 as at 31 December 2020 to 12 093 as at 31 December 2021, said Ipec.

The Commission said in a bid to foster financial stability in the sector, it conferred prescribed assets status to 23 projects in 2021.

Projects denominated in foreign currency had a 100 percent uptake whilst projects denominated in the local currency without inflation hedge were undersubscribed

“Cumulative investments in prescribed assets as of 31 December 2021 amounted to ZW$13 billion and ZW$5 billion, for the pensions and insurance sectors respectively,” it noted.